President Trump on Wednesday ordered the closure of a loophole that allows retailers to send clothes and other goods from China directly to American shoppers without paying tariffs.
But the order could raise prices for consumers and create delays as delivery companies and the United States Postal Service are forced to verify the value of many more packages than they do now, trade and logistics experts said.
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, and Hong Kong. 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.
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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.
Tracking Trump’s First 100 Days ? The Trump administration’s previous actions on China and tariffs
March 9 Declined to rule out that a recession was possible this year ? Feb. 7 Temporarily walked back the suspension of de minimis, a type of duty-free treatment ? Feb. 5 Reversed decision to halt deliveries from China and Hong Kong ? Feb. 4 Halted deliveries to the U.S. from China and Hong Kong ? Feb. 3 Described 10% tariffs against China as just “an opening salvo” ? Earlier entries about China and tariffs
See every major action by the Trump administration ?
Trump’s De Minimis Order Could Raise Costs on Clothes and Goods From China - The New York Times
Lawmakers from both parties have called for reform to the de minimis provision.
“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.
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