De Minimis Dilemma: Trade Tensions and Tariff Troubles

The U.S. is considering changes to the 'de minimis' trade benefit, a key exemption in import tariffs, amid accusations against China of unfair practices and fentanyl crisis implications. Critics argue it allows companies to evade tariffs and inspections, while China exports billions using this exemption, threatening U.S. trade balances.


Devdiscourse News Desk | Updated: 23-01-2025 11:53 IST | Created: 23-01-2025 11:53 IST
De Minimis Dilemma: Trade Tensions and Tariff Troubles

President Donald Trump is weighing changes to the U.S. 'de minimis' trade benefit, which exempts imported goods under $800 from tariffs, as he accuses China of unfair trade practices connected to a fentanyl crisis. This shift contrasts with former President Joe Biden's proposal aimed at curbing this so-called loophole.

The 'de minimis' allowance, in place since 1938, was significantly increased during Obama's era. It's become controversial due to claims that it perpetuates trade imbalances and allows the importation of illicit substances, like fentanyl precursors, which contribute to a national opioid epidemic.

Amid escalating rhetoric against China, Trump's administration has ordered various government departments to assess the financial and security implications of the 'de minimis' policy. With major e-commerce platforms benefiting from these exemptions, the potential reforms may significantly impact international trade dynamics and bilateral relations.

(With inputs from agencies.)

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