Trump closes the de minimis loophole

OPINION:

President Trump closed one of the biggest loopholes in American trade policy last week by eliminating the “de minimis rule” for the world. This move will add more than $100 billion to government coffers while protecting American workers and businesses from the ravages of unfair trade.

For decades, U.S. trade law allowed low-value imports to enter duty-free without formal customs declarations, a policy perhaps sensible when thresholds were minimal and e-commerce nonexistent. However, the $800 de minimis exemption has become a glaring loophole, costing billions of dollars in lost revenue and exposing U.S. manufacturers to relentless, unfair competition.

This crisis began in 2015 when Congress, under intense lobbying from corporations such as Amazon, eBay, FedEx and UPS, quadrupled the de minimis threshold from $200 to $800. K Street lobbyists claimed the move would streamline cross-border trade. Instead, it created an open invitation for global e-commerce giants, including Alibaba, Shein, Temu, AliExpress and Wish, to bypass U.S. tariffs and regulations.

By shipping massive volumes of cheap, often heavily subsidized, individually packaged products directly to American consumers, these vendors systematically evade taxes, tariffs and rigorous inspections that domestic producers and traditional importers must follow.

Major U.S. trading partners wisely refused to follow Congress’ lead. Germany’s threshold remains around $155, Canada’s about $110, Japan’s roughly $70 and Mexico’s just $50. This stark disparity magnifies the disadvantages for American producers, encourages offshoring and severely weakens domestic industries.

Mr. Trump’s executive order puts an immediate stop to this abuse. Starting Aug. 29, all goods — regardless of value, origin or shipping method — must enter the United States through formal customs entry procedures. No more loopholes, no more “duty-free gifts” disguised as commerce and no more enforcement blind spots. With rigorous documentation and detailed scrutiny now mandatory, this measure sharply strengthens customs’ ability to detect fraud and protect American businesses.

The administration has also established a six-month transition process for the international postal network. During this period, postal shipments previously eligible for de minimis treatment will have a specific duty based on the tariff rate associated with their country of origin. That system allows international carriers to adapt while maintaining full compliance with U.S. law.

The benefits of this Trump reform are economic and strategic.

First, ending de minimis is a revenue powerhouse. Since Mr. Trump first suspended de minimis treatment for select countries, the United States has collected more than $300 million in new tariff revenue with negligible collection costs. With full global suspension now in effect, annual revenue is expected to exceed $10 billion, with projections easily topping $100 billion over the next decade.

Second, the de minimis reform enhances national security and supply chain integrity. Informal shipments under the de minimis threshold were subject to minimal inspection, making them ideal vehicles for smuggling counterfeit goods, contraband and even illicit substances.

During Mr. Trump’s first term, a pilot enforcement effort known as Operation Mega Flex, conducted by Customs and Border Protection, which I led from the White House, revealed that more than 12% of de minimis shipments were mis-declared or fraudulent. One-third of those discrepancies involved counterfeit products, including dangerous items such as fake pharmaceuticals.

Third, and most important, ending de minimis supports the broader revival of American manufacturing. Domestic producers, especially small and medium-size firms, have long labored under a double standard: They must fully comply with U.S. tariffs, taxes and border regulations while competing against imported goods that enter the country duty-free because of the de minimis exemption.

Leveling this playing field will encourage reshoring, reinvestment and the kind of value-added production that creates well-paying jobs here at home.

This action is also forward-looking. Congress has already passed legislation to end de minimis by July 1, 2027, but as we’ve learned over and over again, waiting for the future won’t secure our present. Mr. Trump’s order accelerates the timeline, ensuring that America reclaims its trade sovereignty now, not in two years.

In trade, as in life, the small things matter. A single clause in the tariff code quietly drained billions of dollars from our economy and eroded the foundation of fair competition. Now, that de minimis clause is gone.

No matter how small the shipment, every import into the United States must respect our laws, pay our tariffs and go through our scrutiny. That’s how you protect a country. That’s how you rebuild an economy: one import at a time.

It’s another chess move by Mr. Trump that was decades overdue and exactly the kind of leadership America needs.