{"id":2402144,"date":"2025-02-13T08:11:00","date_gmt":"2025-02-13T13:11:00","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/trump-tries-to-close-trade-loophole-that-nets-billions-to-china\/"},"modified":"2025-02-13T08:14:30","modified_gmt":"2025-02-13T13:14:30","slug":"trump-tries-to-close-trade-loophole-that-nets-billions-to-china","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/trump-tries-to-close-trade-loophole-that-nets-billions-to-china\/","title":{"rendered":"Trump Tries To Close Trade Loophole That Nets Billions To China"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Ftrump-tries-to-close-trade-loophole-that-nets-billions-to-china%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2402144&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>President Trump&#8217;s recent executive order introduced tariffs on China,Canada,and Mexico,which involved suspending a \u2064important trade loophole known as\u2062 the de\u200b minimis provision. This provision,\u200b originating from the Tariff Act of 1930, allows low-value imports (currently up to $800) to enter the U.S. without tariffs,benefiting many foreign companies,especially from China.<\/p>\n<p>The de \u200bminimis\u200d threshold has sparked a notable \u2063rise in imports,\u200c with over two-thirds of such shipments coming from China between \u2062fiscal \u2063years 2018 and 2021. In 2023, de minimis imports reached 1 billion \u2062parcels valued at approximately $54.5 billion. Notable companies like \u200cShein and Temu, which \u200dexploit \u2062this provision, have \u200bthrived in\u200b the U.S. market\u200c during the e-commerce boom, increasing consumer choice\u200b but also emphasizing issues related to environmental regulations and labor standards.<\/p>\n<p>Criticism against the de minimis provision \u200chighlights its role in driving\u200d excessive\u2063 consumption, undermining U.S. labor\u2062 and environmental standards, and even aiding \u2064the illicit\u200b drug trade. As foreign competitors benefit\u2062 from \u200btax\u200c exemptions and reduced compliance costs, American \u200dbusinesses face challenges, with\u200b an \u200cestimated 15,000\u200b chain stores projected \u200bto close due to competition from low-cost imports.<\/p>\n<p>Bipartisan support is emerging for reforming\u2064 this provision. Trump&#8217;s order \u200battempted to eliminate it, but \u200dfaced logistical challenges, prompting a follow-up order\u2063 that temporarily paused enforcement\u2064 while adjustments were made. Experts suggest\u200b aligning the \u2064U.S.\u2063 de minimis threshold with Canada&#8217;s stricter limit to\u2064 curb exploitation by\u200c foreign companies and create a more equitable trade environment. A extensive solution is deemed essential to protect U.S. consumers and businesses in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/pandemic-theater-china-drowning-foreign-mail-in-disinfectant-to-stop-airborne-coronavirus\/\" title=\"Pandemic Theater: ... Drowning Foreign Mail in &#039;Disinfectant&#039; to Stop Airborne Coronavirus\">cross-border e-commerce<\/a>.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>President Trump&rsquo;s recent <a href=\"https:\/\/www.wsj.com\/business\/why-trump-is-closing-a-trade-exemption-for-china-d0a5e597?page=1\" target=\"_blank\" rel=\"noreferrer noopener\">executive order<\/a> imposing tariffs on China, Canada, and Mexico included the suspension of a trade loophole. Although the suspension primarily targets low-value imports, its implications are wider than many might realize.<\/p>\n<p>At the heart of this issue is the de minimis provision, which originates from Section 321 of the Tariff Act of 1930. This provision was initially designed to prevent the government from incurring excessive costs and hassles for small imports made by individuals in a single day, as long as the fair retail value of those imports did not exceed $1. Over the years, Congress has raised this threshold multiple times, and it currently stands at <a href=\"https:\/\/crsreports.congress.gov\/product\/pdf\/R\/R48380\" target=\"_blank\" rel=\"noreferrer noopener\">$800<\/a>, making it the most generous <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-cracks-down-on-importation-of-fentanyl-in-mail-washington-examiner\/\" title=\"Biden cracks down on importation of fentanyl in mail - Washington Examiner\">de minimis exemption<\/a> in the world. In contrast, Canada&rsquo;s de minimis exemption is capped at only <a href=\"https:\/\/www.wsj.com\/video\/series\/wsj-explains\/de-minimis-ballooned-this-chinese-markets-exports-now-thats-changing\/F618412D-D2D8-4BED-98CA-D4EBDBB50007\" target=\"_blank\" rel=\"noreferrer noopener\">$15<\/a>.<\/p>\n<p>In recent years, numerous foreign companies, particularly those in China, have capitalized on America&rsquo;s overly generous de minimis threshold amid the e-commerce boom. This exploitation has led to a significant increase in both the volume and value of imports that are exempt from tariffs due to this provision.<\/p>\n<p>A <a href=\"https:\/\/crsreports.congress.gov\/product\/pdf\/IF\/IF12891\/4\" target=\"_blank\" rel=\"noreferrer noopener\">congressional report<\/a> revealed that between fiscal year 2018 and 2021, more than two-thirds of de minimis imports came from China (including mainland and Hong Kong). In 2023 de minimis imports comprised an astonishing 1 billion parcels valued at approximately $54.5 billion, with around $18 billion in shipments originating from China. <\/p>\n<p>The Select Committee on the CCP estimated that two Chinese companies accounted for more than <a href=\"https:\/\/selectcommitteeontheccp.house.gov\/sites\/evo-subsites\/selectcommitteeontheccp.house.gov\/files\/evo-media-document\/fast-fashion-and-the-uyghur-genocide-interim-findings.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">30 percent<\/a> of the daily de minimis shipments in the U.S. These companies are <a href=\"https:\/\/www.wsj.com\/business\/retail\/the-magic-behind-sheins-rise-comes-under-threat-duty-free-shipping-7f1b04ca?mod=article_inline\" target=\"_blank\" rel=\"noreferrer noopener\">Shein<\/a>, a fast fashion online retailer based in Singapore that sources most of its products from China, and <a href=\"https:\/\/www.temu.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Temu<\/a>, a China-based e-commerce marketplace offering a wide range of items from cosmetics to knock-off iPods. These companies ship their merchandise directly to American consumers at extremely low prices, utilizing small shipments that are exempted under de minimis provisions.<\/p>\n<p>Not surprisingly, both companies have experienced significant growth in the U.S. market because their heavily discounted merchandise has attracted budget-conscious Americans facing high inflation. As of January 2024, &ldquo;U.S. monthly active users on Temu grew to 51.4 million [since] its September 2022 launch. &hellip; Shein&rsquo;s users increased from 20.9 million to 26 million during the same period,&rdquo; according to <a href=\"https:\/\/www.wsj.com\/business\/retail\/amazons-new-focus-fending-off-rivals-temu-and-shein-5c6ac205\" target=\"_blank\" rel=\"noreferrer noopener\">The Wall Street Journal<\/a>.&nbsp;<\/p>\n<p>The U.S. Customs and Border Protection agency has <a href=\"https:\/\/www.cbp.gov\/newsroom\/national-media-release\/cbp-proposes-new-rule-strengthen-enforcement-and-limit-duty\" target=\"_blank\" rel=\"noreferrer noopener\">found<\/a> that the volume of de minimis shipments continued to escalate, with shipments reaching nearly 1.4 billion in fiscal year 2024.<\/p>\n<p>The de minimis provision is increasingly under fire for its detrimental effects on both the economy and society. Critics argue that it encourages excessive consumption that harms our environment and allows products that often fall short of U.S. environmental and labor standards to flood our markets.<\/p>\n<p>For example, <a href=\"https:\/\/www.state.gov\/office-to-monitor-and-combat-trafficking-in-persons\/releases\/2025\/01\/uyghur-forced-labor-prevention-act-uflpa-fact-sheet\" target=\"_blank\" rel=\"noreferrer noopener\">the Uyghur Forced Labor Prevention Act (UFLPA)<\/a> enacted in 2021 aims to prevent goods produced with forced labor in Xinjiang, China, from entering U.S. markets. However, the minimal legal scrutiny associated with de minimis shipments creates an escape route for products made under these abusive conditions, undermining the UFLPA&rsquo;s intent and ethics.<\/p>\n<p>An even more pressing concern is the de minimis provision&rsquo;s role in the growth of the illicit drug trade. The Department of Homeland Security <a href=\"https:\/\/www.dhs.gov\/archive\/news\/2024\/09\/13\/dhs-workforce-frontlines-biden-harris-administrations-new-executive-actions-address\" target=\"_blank\" rel=\"noreferrer noopener\">disclosed<\/a> that &ldquo;as of July 30, 2024, 89 percent of all seizures in the cargo environment this fiscal year originated as de minimis shipments, including 97 percent of narcotics seizures and 72 percent of health and safety seizures of prohibited items.&rdquo;<\/p>\n<p>Moreover, the tax exemptions and reduced compliance costs afforded by the <a href=\"https:\/\/amzn.to\/3YuVZYV\">de minimis provision put foreign companies<\/a> at a distinct advantage, forcing American businesses to make painful cuts to survive. The New York Post <a href=\"https:\/\/nypost.com\/2025\/01\/24\/business\/record-15k-us-stores-to-close-this-year-as-shein-temu-surge-report\/\" target=\"_blank\" rel=\"noreferrer noopener\">estimated<\/a> that around 15,000 U.S. chain stores are expected to close, primarily due to fierce competition from low-cost, duty-free imports from companies like Shein and Temu. This situation not only threatens American jobs but also undermines American industry as a whole.<\/p>\n<p>There has been a rare bipartisan support to address the exploitation of the de minimis provision. The former Biden administration took <a href=\"https:\/\/www.wsj.com\/articles\/biden-takes-aim-at-chinas-temu-and-shein-with-trade-crackdown-63d71ca4?mod=article_inline\" target=\"_blank\" rel=\"noreferrer noopener\">executive action<\/a> to limit textiles from China entering the U.S. under the de minimis provision. In early January this year, the Customs and Border Protection (CBP) <a href=\"https:\/\/www.cbp.gov\/newsroom\/national-media-release\/cbp-proposes-new-rule-strengthen-enforcement-and-limit-duty\" target=\"_blank\" rel=\"noreferrer noopener\">proposed<\/a> new rules to prevent some merchandise from qualifying for the de minimis exemption.<\/p>\n<p>Trump&rsquo;s executive order sought to eliminate the de minimis provision entirely. The rollout of this executive order, unfortunately, encountered considerable obstacles. The U.S. Postal Service&rsquo;s abrupt decision to cease inbound parcel shipments from China and Hong Kong in response to the order sparked confusion and outrage among the public. The USPS&rsquo;s <a href=\"https:\/\/www.wsj.com\/business\/logistics\/u-s-postal-service-suspends-shipments-of-china-parcels-bf6239f3?page=1\" target=\"_blank\" rel=\"noreferrer noopener\">reversal<\/a> of this decision only intensified the disorder, demonstrating the crucial need for clear and well-structured trade policies.<\/p>\n<p>In light of these complications, President Trump issued a <a href=\"https:\/\/apnews.com\/article\/tariffs-small-packages-trump-china-deminimis-6d308f4b2340c27ff0b069e05bbe7ffd\" target=\"_blank\" rel=\"noreferrer noopener\">follow-up executive order<\/a> a few days later. This new order temporarily paused the enforcement of part of the previous executive order. It allowed de minimis shipments to continue while giving the Department of Commerce and Customs and Border Protection (CBP) the necessary time to adjust their systems for processing and collecting tariff revenues that fall under the de minimis exemption. The issuance of two executive orders within a few days on the same topic reflects the complex challenges involved in effectively addressing the loophole created by the de minimis provision.<\/p>\n<p>A lasting solution is essential to ensure that cross-border e-commerce does not compromise the safety and well-being of American consumers and businesses. The U.S. Congress should consider lowering the de minimis threshold to better align with those of other countries, such as Canada&rsquo;s $15 limit. By implementing this change, we can significantly reduce the incentive for foreign companies to exploit low-value shipments to evade taxes and regulations. This would create a fairer trade environment for all parties involved and ensure that American interests are protected in the global marketplace.<\/p>\n<hr>\n<div>\n<p>      Helen Raleigh, CFA, is an American entrepreneur, writer, and speaker. She&#8217;s a senior contributor at The Federalist. Her writings appear in other national media, including The Wall Street Journal and Fox News.  Helen is the author of several books, including &#8220;<a href=\"https:\/\/www.amazon.com\/Confucius-Never-Said-Helen-Raleigh\/dp\/1499185278\/ref=sr_1_1?dchild=1&amp;keywords=Helen+Raleigh+Confucius+Never+Said&amp;qid=1606079469&amp;sr=8-1\">Confucius Never Said<\/a>&#8221; and &ldquo;<a href=\"https:\/\/www.amazon.com\/Backlash-How-Chinas-Aggression-Backfired\/dp\/1736008501\/ref=tmm_pap_swatch_0?_encoding=UTF8&amp;qid=1606006113&amp;sr=8-1\">Backlash: How Communist China&#8217;s Aggression Has Backfired<\/a>.&#8221; Her latest book is the 2nd edition of <a href=\"https:\/\/www.amazon.com\/Broken-Welcome-Mat-unAmerican-immigration-ebook\/dp\/B0C44QSPJ9\/ref=sr_1_3?crid=3HFXEVT236ZRW&amp;keywords=The+Broken+welcome+mat+book&amp;qid=1683127487&amp;sprefix=the+broken+welcome+mat+book%2Caps%2C135&amp;sr=8-3\">&ldquo;The Broken Welcome Mat: America&rsquo;s UnAmerican immigration policy, and how we should fix it.&rdquo;<\/a>   Follow her on Parler and Twitter: @HRaleighspeaks.<\/p>\n<\/div><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Trump&#8217;s order on tariffs targets a trade loophole affecting imports<\/p>\n","protected":false},"author":536,"featured_media":2402145,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2025\/02\/Copy-of-Untitled-2025-02-11T165614.863-1.png","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[4501,9168,13150,7221,3634],"class_list":["post-2402144","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-china","tag-economy","tag-loophole","tag-trade","tag-trump"],"fifu_image_url":"https:\/\/thefederalist.com\/wp-content\/uploads\/2025\/02\/Copy-of-Untitled-2025-02-11T165614.863-1.png","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2402144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/536"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2402144"}],"version-history":[{"count":3,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2402144\/revisions"}],"predecessor-version":[{"id":2402148,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2402144\/revisions\/2402148"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2402145"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2402144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2402144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2402144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}