President Trump on Wednesday ordered the closure of a loophole that allows retailers to directly send clothes and other goods from China to American shoppers without paying tariffs.
The loophole, known as the de minimis exemption, currently applies to goods worth less than $800. Such goods are allowed to enter the United States tariff free. Mr. Trump’s order, which takes effect on May 2, removes the exemption from packages from China, the largest source of de minimis shipments. Items bought and shipped this way also require far less customs paperwork.
By ending the exemption, Customs and Border Protection will now collect tariff revenue on shipments worth less than $800. Mr. Trump also said his order would help prevent drug smuggling. He and others have claimed that fentanyl and its precursor ingredients are sometimes shipped to the United States as de minimis shipments.
Shippers in China “hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices,” Mr. Trump’s order said.
Lawmakers from both parties have called for reform to the de minimis provision.
Representative Linda Sánchez, a Democrat of California who has introduced legislation to end the exemption, said Mr. Trump’s order did not go far enough and needed to apply to all trade. “Otherwise, we’ll be playing a game of Whac-a-Mole, as bad actors and fentanyl smugglers simply relocate their operations to other countries to continue exploiting the loophole,” she said in a statement.
“For too long, this customs loophole has let foreign exporters flood our market with cheap goods and helped drug traffickers move fentanyl past our borders — resulting in factory closures, job losses and deaths,” Representative Rosa DeLauro, a Democrat of Connecticut, said in a statement on Thursday.