The De Minimis Debate: Trump's Trade Tactics and Global Implications

The U.S. has halted China's 'de minimis' exemption, which allowed duty-free shipments under $800. This decision, part of Trump's trade strategy, addresses trade imbalances and fentanyl misuse. Online retailers benefited from de minimis, but critics argue it bypassed tariffs and fostered unfair competition.

In a significant move, U.S. President Donald Trump has recently closed a trade loophole known as the 'de minimis' exemption, impacting the shipment of low-value packages from China. This decision is a facet of Trump's broader tariff strategy, which includes imposing an additional 10% tariff on Chinese goods.

The 'de minimis' rule, a longstanding U.S. policy since 1938, waived tariffs for imports valued below $800. Designed to ease administrative burdens, it allowed a surge in low-value shipments, reaching over 1 billion packages in 2023. This exemption has been controversial due to its link to trade imbalances and as a conduit for illegal drug imports.

Critics argue that 'de minimis' enabled companies to skirt tariffs and inspections meant to block products made with forced labor. Retail giants like Shein and Temu benefited, prompting rivals like Amazon to adopt similar strategies. Trump's move could reshape global trade dynamics, influencing China's economy significantly.

(With inputs from agencies.)