Trump Closes Tariff Loophole That Let China Flood America With Knockoff Goods, Drugs

The Trump administration has officially closed a tariff loophole which China had long exploited to flood the U.S. with cheap goods and increasingly, deadly drugs.

President Donald Trump’s April 2 executive order ended the de minimis loophole effective Friday. The loophole had allowed imports under $800 to enter the U.S. duty-free and with little to no customs scrutiny, according to a White House fact sheet.

In 2022, over 80% of all U.S. imports qualified for this exemption. Last year alone, U.S. Customs and Border Protection (CBP) processed more than 1.3 billion de minimis packages, nearly four million every day, government statistics show.

Congress raised the threshold from $200 to $800 in 2016, claiming it would help American consumers. Instead, Chinese mega-retailers like Temu and Shein used it to ship microwaves, spatulas, and knockoff electronics straight to American doorsteps, bypassing tariffs and gutting U.S. manufacturers, The New York Times reported. After Trump imposed tariffs during his first term, Chinese exporters simply routed their products through de minimis to dodge the duties and keep the profits flowing, according to the Times.

In 2018, Chinese firms shipped about five billion dollars worth of low-value goods under the rule, per information from the U.S. Congress’ website. By 2023, that number had exploded to $66 billion. Under the new order, packages less than $800 will face a 30% tariff or $25 per item. That figure increases to $50 per item on June 1, 2025.

“De minimis. It’s very — it’s a big deal. It’s a big scam going on against our country, against really small businesses,” President Donald Trump said during a Wednesday cabinet meeting. “We’ve ended it.”

Critics say the loophole gave Chinese producers an unfair edge and crushed American jobs. While other countries havetheir own de minimis thresholds, few come close to the U.S. at $800, according to data from the Global Express Association cited in a Times report. Saudi Arabia’s threshold is $266 and the EU’s is $171. Meanwhile, China’s is less than $10.

Twenty-eight American textile mills have shut down over the past two years alone thanks to the de minimis loophole, according to Kim Glas, president of the National Council of Textile Organizations.

“We are grateful to President Trump and his administration for closing the destructive de minimis loophole. This tariff loophole has granted China almost unilateral, privileged access to the U.S. market at the expense of American manufacturers and U.S. jobs,” she said.

But it wasn’t just about cheap imports. Federal agents say the loophole became a key smuggling route for synthetic drugs like fentanyl. Since Congress raised the de minimis threshold in 2016, fentanyl overdose deaths in the U.S. have surgedby 350%, according to data from the National Center for Health Statistics (NCHS).

Much of the fentanyl in the United States enters via the southern border, but the chemicals often originate in China and are increasingly shipped through de minimis channels.

As de minimis goods go straight to consumers, shippers aren’t required to declare as much data at the border. That made it nearly impossible for CBP officers to intercept dangerous cargo.

“What we’re seeing in the de minimis environment in particular, is that we’re not getting enough truly accurate data,” former acting CBP Commissioner Troy Miller said in an interview last year.

Smugglers now routinely hide deadly synthetic opioids in fake pharmaceuticals, CBP officials at JFK Airport said in a press release.

“The drug trafficking organizations use de minimis to import precursor chemicals, pill presses, and pill dies,” according to Andrew Renna, Assistant Port Director for Cargo Operations at JFK Airport.

Many of the drugs mimic legitimate pharmaceuticals but are laced with deadly compounds like fentanyl, xylazine, and nitazenes, the latter up to 800 times more potent than morphine. Officers at JFK said they now see these substances “at least a few times a week.”

And drugs are just the start. Customs agents have intercepted AK-47s hidden in food containers, and seized prohibited animal products from countries ravaged by African swine fever and bird flu, according to the press release. In one case, CBP agents in Florida discovered a disassembled helicopter shipped from Venezuela — packed into 21 separate crates — all under de minimis.