by HaMin Jeong

In just the first few weeks of his second term in the Oval Office, President Trump has made sweeping changes to U.S. international trade policies.[1] One way President Trump plans to disrupt the norms of international trade policy beyond tariffs is by limiting the de minimis trade exception.

Responding to the expansion of global trade, the United States passed the Tariff Act of 1930 (“1930 Act”).[2] Section 321(a) of the 1930 Act, as amended, provides exceptions to tariffs imposed on importers, allowing goods valued under $800 to enter the U.S. duty-free.[3] Congress created this exception, commonly known as the “de minimis” exception, “in order to avoid expense and inconvenience to the Government disproportionate to the amount of revenue that would otherwise be collected.”[4] However, since raising the de minimis threshold from $200 to $800 in 2015, a concerningly high volume of goods enter the U.S. with little oversight, ensuring that such goods comply with U.S. trade rules such as, “health and safety requirements, intellectual property rights, consumer protection rules, and to block illicit synthetic drugs[.]”[5] Foreign companies that sell low-cost goods in the U.S. can ship items directly from their foreign manufacturers to U.S. consumers and avoid any duty-related fees, so long as the shipment does not exceed $800 per day per customer.

            Shein and Temu, Chinese e-commerce giants, are some of the biggest beneficiaries of the de minimis exception, paying significantly less on duty and tariffs than other textile companies because of their incredibly low prices.[6] The two companies share similar manufacturing and distribution practices–both produce low-cost goods for low-cost labor in China, and rather than using U.S. distributors, both instead engage in “direct-to-consumer sales” from Chinese manufacturers straight to the homes of U.S. consumers.[7] Today, more than one billion shipments enter the U.S. annually under the de minimis exception, burdening the CBP from effectively enforcing trade and safety laws at the border.[8] The massive volume of packages that enter under de minimis “makes it impossible for the government to properly screen the shipments for import violations[,]” making it particularly challenging to regulate Shein and Temu’s trade activities in the U.S.[9]

In September 2024, the Biden Administration announced a proposal to limit de minimis, seeking to target Chinese textile companies, such as Shein and Temu.[10] Specifically, the Biden Administration sought to crack down on de minimis shipments by using shipment classification numbers, narrowing the exception’s eligibility, and “strengthen[ing] CBP’s [U.S. Customs and Border and Protection] . . . ability to target and block unsafe products from entering” the border.[11] Though President Biden did not see his vision for de minimis reform come to fruition, President Trump just might–President Trump similarly announced but rolled back on his statement that he would eliminate the exception entirely.[12] President Trump has not yet eliminated the exception, but the movement towards limiting de minimis threatens Shein and Temu’s business strategies regardless of party lines.

Though there are benefits to the de minimis exception, the harms to the American economic ecosystem outweigh those benefits. The primary benefit of the de minimis exception is that it allows foreign suppliers and small businesses to sell at low prices in the U.S., because they do not need to account for an import tax in their respective formulas for determining prices.[13] However, the low cost cannot serve a significant benefit if the products and sellers themselves harm their consumers. Shein and Temu’s incredibly low prices attract buyers who are likely unaware that they compromise their data privacy for $11 t-shirts.[14] Both companies have been scrutinized for faulty data-privacy protections of their customers with Shein being fined almost $2 million in New York, because it “misled consumers about the extent of its data breach [and] had notified ‘only a fraction’ of affected users that data credentials had been compromised[.]”[15] De minimis also perpetuates Shein and Temu’s ability to produce their clothes incredibly fast and cheap, using ideas stolen from others. The two companies are known to give no care nor credit to the original creators of the works they illegally copy for sale, infringing various U.S. intellectual property rights.[16]

As long as minimal oversight over de minimis and its massive beneficiaries continue, companies like Shein and Temu will continue harming U.S. consumers under the guise of cheap prices–trading an $11 shirt for data privacy and intellectual property violations is not a worthy deal. Accordingly, bipartisan efforts to restrict de minimis are crucial to effectively enforce U.S. trade regulations and protect American consumers and small businesses.

[1] See Reciprocal Trade and Tariffs, The White House (Feb. 13, 2025), https://www.whitehouse.gov/articles/2025/02/reciprocal-trade-and-tariffs/; FACT SHEET: President Donald J. Trump Restores Section 232 Tariffs, The White House (Feb. 11, 2025), https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-restores-section-232-tariffs/. See generally Ana Swanson, Trump Says He’ll Rework Global Trading Relations with ‘Reciprocal’ Tariffs, N.Y. Times (Feb. 13, 2025), https://www.nytimes.com/2025/02/13/us/politics/trump-tariffs.html (detailing how President Trump’s reciprocal tariffs, along with his previous tariff and trade policy changes, will affect domestic inflation and international relations, such as the rising threat of a “trade war”).

[2] 19 U.S.C. § 1321(a).

[3] Id. § 1321(a)(2).

[4] Id. § 1321(a).

[5] Id. § 1321(a)(2)(C); FACT SHEET: Biden-⁠Harris Administration Announces New Actions to Protect American Consumers, Workers, and Businesses by Cracking Down on De Minimis Shipments with Unsafe, Unfairly Traded Products, Biden White House Archives (Sept. 13, 2024) https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2024/09/13/fact-sheet-biden-harris-administration-announces-new-actions-to-protect-american-consumers-workers-and-businesses-by-cracking-down-on-de-minimis-shipments-with-unsafe-unfairly-traded-products/; see Christopher A. Casey, Cong. Rsch. Serv., R48380, Imports and the Section 321 (De Minimis) Exemption: Origins, Evolution, and Use 4 (Jan. 31, 2025).

[6] Sara Dorn, Trump Reinstates ‘De Minimis’ Tariff Exemption for Shipments Under $800—Boosting Shein and Temu, Forbes (Feb. 7, 2025), https://www.forbes.com/sites/saradorn/2025/02/07/trump-reinstates-de-minimis-tariff-exemption-for-shipments-under-800-boosting-shein-and-temu/; Casey, supra note 5, at 36-37.

[7] Angela M. Santos et al., Administration Action Could Unravel the De Minimis Exception for Goods from China, ArentFox Schiff (Oct. 3, 2024), https://www.afslaw.com/perspectives/alerts/administration-action-could-unravel-the-de-minimis-exception-goods-china; see Casey, supra note 5, at 36-37.

[8] Andrew Bisbas et al., CBP Proposes Rule that Would Eliminate Section 321 De Minimis Exemption Eligibility for Shipments Subject to Section 301 Tariffs, DLA Piper (Jan. 21, 2025), https://www.dlapiper.com/en-us/insights/publications/2025/01/cbp-proposes-rule-that-would-eliminate-section-321.

[9] Santos, supra note 7.

[10] See Biden White House Archives, supra note 5.

[11] Id.

[12] Dorn, supra note 6.

[13] See Why Small Businesses and Shoppers Should Care About ‘De Minimis’ Tariffs, Am.’s Small Bus. Network (Feb. 5, 2025), https://www.asbn.com/scale-your-business/ecommerce/why-small-businesses-and-shoppers-should-care-about-de-minimis-tariffs/; Stephen Finan, “Clothing” the De Minimis Loophole: The Story of an Exception Swallowing the Rule, 76 Admin. L. Rev. 453, 472-74 (2024) (explaining that the low prices of imported goods, made possible by de minimis “increases Americans’ purchasing power” by allowing Americans to save money).

[14] Nicholas Kaufman, U.S.-China Econ. & Sec. Rev. Comm., Shein, Temu, and Chinese E-Commerce: Data Risks, Sourcing Violations, and Trade Loopholes 2, 4, 5 (2023), https://www.uscc.gov/sites/default/files/2023-04/Issue_Brief-Shein_Temu_and_Chinese_E-Commerce.pdf.

[15] Id. at 2.

[16] See, e.g., Perry v. Shein Distr. Corp., No. 2:23-cv-05551-MCS-JPR, 2024 WL 1136321, slip op. at *1 (C.D. Cal. Feb. 15, 2024); Cat Coven, LLC, v. Shein Fashion Group, No. CV 19-7967 PSG, 2020 WL 3840440, slip op. at *1 (C.D. Cal. Mar. 12, 2020).

 

FN1

Supports

Correct use of internet source per R18 except title of piece should be italicized, see signal per R4, NY Times should be in small caps per R18 and the correct short form of February is Feb.

 

FN2

Supports

Correct citation of a statute per R12.

 

FN3

Supports

Correct use of short citing a statute per R12.3.

 

FN4

Supports

Correct use of short citing a statute per R12.3.

 

FN5

Supports

Correct use of short citing a statute per R12.3 and should italicize the title and short cap the name of publication per R18. Correct use of connection with a period per R1.4.

 

Please change the Casey Congressional Research Service source to fit BB R 13.4

 

FN6

Supports

Correct citation of a website per R18 except no underlining of the publication name, small caps is sufficient. Correct citation of supra per R4.2 except Casey is in note 5 and need a comma after the note number.

 

FN7

Supports

Correct citation of a website per R18 and supra per R4.2 and changed the note number to reflect the one in the submission. I am noting there is inconsistency with making a new sentence after a change in signal, I am not sure if that is incorrect but worth making the same. Here you used a semi colon and in FN5, you made a new sentence with the see signal.

 

FN8

Supports

Correct use of supra per R4.2 but I think the name of the authority is so long that you should consider not using supra at all.

 

 

 

 

 

 

 

 

According to BB R 10.8.1, the case number should be before the reporter (WL) information, please rearrange accordingly