Former Reagan economist Art Laffer discusses President Donald Trump’s agreement with China to a 90-day tariff reduction on ‘The Bottom Line.’
The U.S. is slashing the “de minimis” tariff on cheap goods from China “from 120 percent to 54 percent,” according to a new executive order signed by President Donald Trump.
The development comes after the two countries struck a trade deal in which the U.S. will temporarily lower its tariffs on Chinese goods from 145% to 30%, while China will reduce its levies on American products from 125% to 10%.
Trump previously eliminated what was known as the “de minimis” exemption where imports valued under $800 from China and Hong Kong were not subject to tariffs or required to undergo rigorous customs checks. The newly signed executive order will now provide some relief to Chinese e-commerce companies such as Shein and Temu.
Starting Wednesday, the “de minimis” tariff will drop from 120% to 54%. A flat fee of $100 per parcel will remain in effect, but that won’t increase to $200 on June 1 as previously announced, the executive order states.
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An employee packages garments for the online Chinese e-commerce company Temu at a clothing factory in Guangzhou, China, on April 16. (Jade Gao/AFP via / Getty Images)
Reuters, citing two delivery experts, also reported Wednesday that packages from commercial shippers such as UPS, FedEx and DHL – who have handled millions of items from Shein and Temu – will now default to the 30% tariff rate that the U.S. imposed on China.
The White House did not immediately respond Thursday to a request for comment from FOX Business.
The “de minimis” loophole has previously been criticized for allowing shipments of fentanyl precursors to enter the country.
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Workers make clothes at a garment factory that supplies Shein in Guangzhou, China, in July 2022. (Jade Gao/AFP via / Getty Images)
The White House said many Chinese-based shippers hide illicit substances, including synthetic opioids, in low-value packages to exploit the de minimis exemption.
Shein and Temu have seen rapid growth in the U.S. market through de minimis shipments of fast fashion, toys and other consumer goods to cost-conscious consumers.
A woman receives her order from fast-fashion e-commerce company Shein. (Rodrigo Arangua/AFP / Getty Images)
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A report by the Congressional Research Service noted that Shein and Temu combined to comprise about 17% of the U.S. discount market as of November 2023.
FOX Business’ Michael Dorgan, Landon Mion and Reuters contributed to this report.
