Washington Closes a Big Trade Loophole

It’s not permanent, but it’s not nothing: A long end to the de minimis exemption is signed into law as part of the budget reconciliation bill.

On the Fourth of July, surrounded by lawmakers from his own party, President Donald Trump signed a big policy and budget bill at a White House picnic. It’s agenda-setting legislation that cuts taxes and social services while spending big on administration priorities like border enforcement.

It’s a hefty bill; something like 900 pages. As such, there’s a lot in it – including an end to the de minimis rule. Were we sure they were gonna keep it in? No. But they kept it in.

This something the Alliance for American Manufacturing has been talking about for a long time. Originally introduced to ease the burden of import inspections on customs officers for goods considered to be of trivial value – initially $1 in the 1930s – the de minimis provision was never meant to be a means of substantial commerce. And its threshold has seen gradual increases in the years since, reaching $200 in the 1990s. But in 2016, Congress raised it dramatically to $800. That meant any package sent into the United States with a value declared less than that would face only minimal U.S. customs inspections from U.S. customs and could be imported duty-free.

Importers noticed.

In 2015, 139 million packages were shipped into the United States via de minimis. In 2024 that number reached 1.36 billion, with a cumulative value of approximately $65 billion. Much of it came from Chinese manufacturers who used the loophole to complete direct-to-consumer sales, and e-commerce apparel retailers like SHEIN and Temu boomed. Amazon made a lot of money on it too.

But there are serious problems with this light touch. It encourages contraband and counterfeiting while also allowing in products made with unsafe chemicals and forced labor. What’s more, the steady import flood the high threshold created undermines American manufacturers and supply chains.

That’s why AAM for years has called for de minimis reform and applauds this move now. Under it, the de minimis exemptions for imports from all countries – not just those from China, which have been already limited by the Trump administration – will end in July 2027.

To be clear, this isn’t a forever thing. This is passing as part of a budget reconciliation bill, so it will only apply within that bill’s 10 year scoring window. Still, coupled with the White House’s actions on Chinese de minimis imports, it’s a step in the right direction toward getting a permanent policy put in place. We’re happy to see this rule change pass into law.