Known as the de minimis exemption, it has been used by the Chinese shopping giants Shein and Temu to send millions of packages to the US each year duty-free, helping keep the prices of their products low for Americans. But the exemption is also important for marketplaces like eBay and Etsy that allow people in the US to buy goods from China-based sellers.
Scrapping the measure may also negatively impact Amazon, which recently launched a division for affordable made-in-China products that competes directly with Temu and Shein. Amazon did not immediately respond to a request for comment.
Trump tried scrapping the de minimis provision for Chinese packages in February via a separate executive order, but he quickly walked back the measure after it became clear that US Customs and Border Protection did not have the resources in place to inspect millions of additional packages a day and ensure the correct associated tariffs were being paid. His new order says the duty-free exemption will go away on May 2, giving CBP a few weeks to prepare.
Ram Ben Tzion, cofounder and CEO of Publican, a digital shipment vetting platform, says he believes Trump intends to use eliminating de minimis as a bargaining chip in negotiations with China, because if the policy is really scrapped and replaced by high tariffs, it could radically reshape online shopping as Americans know it.
“The magnitude and the importance of this, if it does ultimately come into effect, is gigantic,” says Ben Tzion. “It could dramatically change e-commerce. It could dramatically change some of the giants that we have known over the past few years.”
Some tech companies, however, especially those already entrenched in areas like logistics and data analytics, may see opportunities in Trump’s trade policies. Almost immediately after the tariffs were announced, defense contractor Palantir published a blog post promoting an artificial intelligence service that the company boasted integrates “a wide array of data sources” to help businesses ensure that “tariff-related decisions consider the full operational context.”
Jay Gerard, the head of customs and logistics at the Mexico City-based tech and logistics startup Nuvocargo, says that as much as he “hates tariffs,” they’ve created more demand for his company’s services. Nuvocargo operates as a freight broker between Mexico and the US, and sells software that helps customers get their goods across the US border. It also helps them process customs documents. The company is now forecasting an increase in customer activity for April, May, and June, predicting that the tariffs will boost business.
Still, the past month has been “chaos” for importers and shippers, Gerard says, leaving many of them in expensive holding patterns. Early in March, Trumped slapped a 25 percent tariff on Mexican and Canadian imports, only to walk it back a couple days later. During that short time, Gerard says, if a freight truck crossed the border, the importer paid the fee.
“If they imported $100,000 worth of drinks that day,” he explains, “they were paying $25,000 in duties. If the truck crossed a day later, that disappeared.”