U.S. "De Minimis" Exemption One of the Highest in the World

As a part of the tariffs imposed by the Trump administration Saturday on Canada, Mexico and China, so-called "de minimis" rules on small imports from the countries were suspended. "De minimis" rules say that incoming goods under a certain value are not subject to import duties (and sometimes tax). As a result, the U.S. temporarily stopped accepting parcel from China and Hong Kong as many popular retailers send scores of "de minimis" shipments from these locations, including the likes of Temu or Shein. On Wednesday, the U.S. resumed the import of the packages. USPS said it was working on a solution of implementation of the new rules that would cause the least disruptions to parcel delivery.

While the rule change was explained in the case of China, but also Canada, with stopping the unregistered import of fentanyl or its ingredients to the U.S., most of the parcels affected will come from e-commerce platforms, with Chinese imports taking up the bulk of "de minimis" shipments. Checking the parcels to impose Trump's new additional 10 percent tariff on Chinese goods as well as any other tariffs that might apply per product category would cause a lot of extra work. However, the ability of Chinese e-commerce sellers to create large business footprints overseas while skirting many of the dues of a traditional export business has also caused discontent in the U.S. and elsewhere.

The Biden administration in September had announced steps like protecting certain industries and keeping out certain questionable products by exempting them from "de minimis" while at the same time increasing reporting requirements, citing concerns about high parcel volumes concealing illicit substances as well as trade fairness in the light of China's burgeoning e-commerce-by-international-shipment sector. The EU is also mulling to do away with its "de minimis" rule in order to fairly charge Chinese direct sellers. Recent reporting also points out how many of the products shipped from the likes of Shein et al. are not up to quality standards, which caused complaints from consumer protection bodies.

Data republished by the Department of Commerce shows that more than 100 countries around the world employ "de minimis" in order to speed up international shipping. However, the maximum value such parcels can have varies widely. The U.S.' $800 threshold is one of the highest in the world while EU countries impose charges on imports of much lower value (above €150 - approximately $156). China's "de minimis" rules are also more strict, with any tax or duty under 50 Yuan Renminbi (approximately $7) considered void - this would for most products be in line with a value of $99 or less. The country also already has a more refined approach to "de minimis" with a pre-registration and approval system for e-commerce traders in place that allows for higher exemptions at the discretion of the government. Other countries have also posed additional hurdles to "de minimis", for example exempting B2B shipments or specific goods. Others allow neighbors or certain major trade partner to take advantage of a bigger "de minimis" allowance.