Trump Closed the De Minimis Loophole. Here’s Why It Was a National Emergency.
For too long, Chinese exporters and global e-commerce giants used a legal backdoor to undermine U.S. workers, business, and the environment. That ends now.
3 million packages a day. Over 1.4 billion in 2024.
These are the shipments that entered the United States duty- and tariff-free under the so-called “de minimis” loophole.
In Latin, de minimis means “of little consequence.” But this loophole has had massive consequences—devastating American manufacturers, eroding fair-market competition, and enabling a pipeline for millions of pounds of fentanyl precursors to flow into our communities.
As The Tariff Times reported today, the Trump administration has officially closed the de minimis loophole, following through on an executive order issued earlier this year. That means millions of daily shipments—roughly 62% of them from China—will now face customs inspections and tariff duties, including the new 125% tariff on Chinese goods.
The campaign to shut down this loophole brought together an unusually broad coalition:
Labor unions like the AFL-CIO,
Manufacturing advocates like the Coalition for a Prosperous America,
Law enforcement organizations such as the National Sheriffs Association and the International Association of Chiefs of Police,
And groups representing families devastated by fentanyl, including Families Against Fentanyl, Lost Voices of Fentanyl, and others.
Yes, Americans may no longer enjoy ultra-cheap, disposable products from Shein or Temu. But that’s a tradeoff worth making.
Here are five reasons why.
1. Ending illegal Chinese dumping
Under international trade law, dumping refers to the practice of selling goods in another country at prices below their market value or cost of production, typically to drive out local competition. It’s an unfair trade practice explicitly targeted by the WTO Anti-Dumping Agreement, which allows nations to impose penalties when dumping causes injury to domestic industries.
For years, Chinese exporters have used the de minimis loophole to bypass U.S. tariffs and flood our market with artificially cheap, often state-subsidized goods. Platforms like Shein, Temu, and AliExpress leveraged this backdoor to ship millions of packages daily without paying duties or facing meaningful customs inspection.
The result has been a two-tiered trade system: American manufacturers play by the rules of the free market, employing American workers while complying with labor and safety standards. Meanwhile, Chinese firms receive illegal subsidies from the Chinese Communist Party, use state-sponsored design theft, and exploit the De Minimis loophole to undercut American producers both big and small.
Nowhere has this been felt more acutely than among independent sellers and artisans. On platforms like Etsy, which once championed handmade and original goods, cheap knockoffs from Chinese sellers now dominate entire product categories. A Wedbush Securities report estimated that over 2 million items on Etsy—more than 5% of all listings—could be counterfeit or infringing on intellectual property. Sellers report watching their original designs copied, mass-produced, and sold back into the U.S. market for a fraction of the price.
Closing the de minimis loophole ends this charade. It restores the most basic protections for our domestic market: If you want access to the American consumer, you play by American rules. No more backdoor dumping. No more zero-tariff shipments of knockoff goods. And no more systematic undercutting of U.S. workers and businesses.
2. Killing the Exploitative Drop-Shipping Industry
The rise of drop-shipping—where sellers list and advertise products they never touch, instead having them shipped directly from low-cost overseas suppliers—has created a sprawling, deceptive shadow economy. And it’s one that was almost entirely propped up by the de minimis loophole.
By allowing shipments under $800 to enter the U.S. without tariffs or meaningful inspection, the loophole enabled a generation of internet hustlers to build entire businesses on zero-value arbitrage: find a product on AliExpress or Temu, slap a Shopify site and Instagram ad on it, and sell it to unsuspecting Americans at a 300% markup. No warehouse, no quality control, no accountability.
But this wasn’t just clever marketing—it was predatory. Consumers were routinely misled into believing they were buying from small businesses or American-made brands, when in fact they were purchasing the same cheap Chinese products available for a few cents overseas. When problems arose—delays, defects, fakes—there was no customer service, no return infrastructure, and no recourse.
Worse still, this industry became a breeding ground for counterfeits, unsafe products, and scam operations, many of which vanished as quickly as they appeared. The drop-shipping economy eroded trust in online commerce, displaced legitimate sellers, and made it impossible for honest small businesses to compete on price or fulfillment time.
By closing the de minimis loophole, the federal government has effectively cut off the blood supply to this exploitative model. Without the ability to mass-import low-cost goods tariff-free, the economic logic of drop-shipping collapses. Sellers will now have to absorb tariff costs, face customs scrutiny, and engage in actual product stewardship—or get out of the game.
This is not just an economic correction. It’s a moral one.
3. Blocking the flow of Fentanyl Precursors
In January 2023, federal agents raided the home of a 63-year-old maintenance worker in Tucson, Arizona. His name was Wadih Daahir, and by all appearances, he was a quiet man with a simple side business—hauling mail-order packages across the border to Mexico for a fee.
But what investigators found in his home was not a tractor part or a household gadget. It was 40 kilos of 4-AP, a powerful chemical precursor used in the synthesis of fentanyl, the synthetic opioid responsible for killing nearly 75,000 Americans last year alone.
Authorities estimate that over the previous two years, Daahir had unknowingly transported over 7,000 kilograms—15,432 pounds—of fentanyl-making chemicals to an operative working for the Sinaloa Cartel. That’s enough to produce 5.3 billion counterfeit pills—enough to kill every person in the United States several times over.
And how did those chemicals get here?
They arrived legally. By air, from China to Los Angeles, where they were cleared through U.S. Customs under the de minimis loophole, which allows shipments under $800 to enter duty-free and with minimal inspection or documentation. From there, they were repackaged and sent overland to Tucson—then discreetly ferried across the border into Mexico, hidden in plain sight among the clutter of America’s e-commerce boom.
This is how the fentanyl crisis now travels—not in duffel bags or covert air drops, but in cardboard boxes, labeled as cleaning agents, seeds, or household goods, shipped through major air hubs like LAX, which processed over 684,000 air parcels per day in fiscal 2023. The system is overwhelmed. According to Customs and Border Protection, the U.S. received over 1 billion de minimis packages last year alone. The vast majority of them—from China.
This loophole, originally pitched as a convenience for American shoppers, has transformed the United States into a major transshipment point for Mexican drug cartels. Even small amounts of precursor chemicals—often priced between $130 and $260, far below the de minimis threshold—can yield millions of deadly pills. Chinese sellers are so confident in the system’s weaknesses that some even offer free replacements if a shipment is seized.
The U.S. system relies heavily on an honor code: exporters are expected to tell the truth about what’s inside the boxes. But as Homeland Security officials admit, it’s easy to falsify documents, hard to inspect millions of parcels, and nearly impossible to find the needle of fentanyl in the haystack of sneakers, toasters, and fake jewelry.
As Special Agent Eddy Wang of Homeland Security Investigations put it:
“It’s unfortunate and ironic how they’re using the U.S. trade system to come back full circle and then kill Americans.”
The closure of the de minimis loophole is a direct blow to this deadly pipeline. It restores scrutiny at the border, mandates accountability, and begins to close the invisible freight lane that has been used to smuggle death by the kilo.
No more fentanyl precursors disguised as shampoo bottles.
No more drug cartels exploiting our customs system with impunity.
No more passive acceptance of a trade rule that fueled America’s worst drug crisis in history.
4. Helping the Environment and Preventing Massive Waste
The 1.4 billion de minimis packages that entered the United States last year weren’t just an economic loophole—they were an environmental disaster.
Every one of those packages required its own packaging materials, its own transport leg—often via air freight—and its own last-mile delivery. Multiply that by 1.4 billion, and you get a logistics operation of staggering environmental cost: millions of tons of carbon emissions, endless packaging waste, and an invisible but relentless strain on the energy systems that power global trade.
And what did we get in exchange?
Cheap, disposable goods designed to fall apart after a few uses. Products so poorly made they’re meant to be thrown away, not repaired. Items that cost so little because they were mass-produced by exploited labor, then shipped duty-free halfway across the world.
At the center of this pollution engine is fast fashion—a business model perfected by Chinese platforms like Shein and Temu, which crank out thousands of new clothing items every day. These garments are not made to last. They’re made to be worn once, maybe twice, then tossed. And because they arrive in tiny parcels under the $800 threshold, they’ve flown under the radar of tariffs and environmental scrutiny—until now.
Textile waste from fast fashion is one of the fastest-growing forms of landfill waste in the United States. The dyes, plastics, and microfibers used in these garments leach toxins into soil and water. Meanwhile, the constant churn of air cargo and local delivery needed to satisfy this on-demand system of consumption turns what should be rare, necessary trade into a nonstop environmental burn rate.
The de minimis loophole didn’t just allow this system to exist. It incentivized it. When it costs nothing to ship millions of packages from China into the U.S. without tariffs or oversight, the rational choice for sellers is to make the goods cheaper, lighter, and more disposable. And the rational choice for consumers is to treat them as throwaway novelties.
By closing the loophole, we strike a blow not just for American industry, but for environmental sanity. We slow down the flood of ultra-cheap, ultra-wasteful imports. We raise the cost of trash and give breathing room to a culture of durability, reuse, and quality.
We don’t just need fewer packages.
We need fewer products that deserve to be thrown away.
5. Contributing Billions in New Government Revenue
Now that the de minimis loophole is closed, roughly $33 billion in annual shipments from China—previously untaxed—will now be hit with a 125% tariff. That alone could generate as much as $41.25 billion in new federal revenue every year.
To put that in perspective:
The bottom 75% of U.S. taxpayers paid about $274.1 billion in federal income taxes in 2022. That means this one policy could offset up to 15% of their total tax burden.
That’s not just economic policy—it’s tax justice.
And here’s the kicker: even if this tariff doesn’t generate the full projected amount—because some shipments will surely drop off or re-route—the result is still a win. Either:
Foreign firms choose to keep shipping, and we collect billions in tariffs.
Or they stop shipping, and we slash the flood of cheap imports that have been gutting our economy, polluting our environment, and undercutting honest American businesses.
Either way, we win—with more revenue, more fairness, and more breathing room for the American economy.
A Policy That Puts America First—Finally
The closure of the de minimis loophole is more than a technical trade tweak. It’s a full-spectrum reset of how we treat access to the American market.
For too long, we’ve allowed foreign firms—especially those backed by the Chinese Communist Party—to exploit our honor system, dump subsidized goods, pollute our environment, hollow out our industries, and flood our streets with death, all while paying nothing in return.
No more.
This single move:
Ends illegal dumping that’s destroyed small businesses and creative entrepreneurs.
Shuts down the drop-shipping scams that trick consumers and poison trust.
Disrupts the deadly fentanyl supply chain that has turned America into a transshipment point for chemical warfare.
Slows the flood of cheap, disposable imports choking our landfills and atmosphere.
And generates tens of billions in new revenue—relieving pressure on the very Americans who’ve borne the cost of this broken system for decades.
This is what a serious trade policy looks like. It’s strategic, moral, and unapologetically in the national interest.