The Trump administration is ending a longstanding tax exemption on low-value packages, a move White House officials say will create jobs, raise revenue and even save lives.
By early Friday morning, tariff exemptions for packages shipped to the United States worth $800 or less, popularly known as the “de minimis” rule, will come to an end for all countries, senior administration officials said. The move comes months after President Donald Trump signed an executive order to end the de minimis exemption for China and Hong Kong.
The White House fiercely defended the action during a Thursday press call, framing it as defense against the flow of drugs and the protection of American workers.
“President Trump’s ending the de minimis loophole will save thousands of American lives by restricting the flow of narcotics and other dangerous and prohibited items, add up to $10 billion a year in tariff revenues to our Treasury, create thousands of jobs and defend against billions of dollars lost to counterfeiting, piracy and intellectual property theft,” White House trade adviser Peter Navarro said.
“Foreign post offices need to get their act together when it comes to monitoring and policing the use of international mail for smuggling and tariff evasion purposes,” Navarro added. “We are going to help them do that, but at this point, they are vastly underperforming express carriers like FedEx, DHL and UPS. In an age of AI, information saves lives.”
Established by Congress in 1938, the de minimis exemption has, for decades, allowed low-value packages to enter the U.S. duty free. The exemption threshold has risen over the years, with the last change in 2016 including products valued at or below $800.
The vast majority of shipped products fall within the exemption, with more than 92% of all cargo entering the U.S. entering via de minimis, according to Customs and Border Protection.
In April, Trump signed an executive order formally ending the de minimis exemption for China and Hong Kong. Shippers from the People’s Republic of China, the president said, hide “illicit substances” and “conceal the true contents of shipments” sent to the U.S. and avoid detection due to the de minimis exemption.
An executive order Trump signed in late July set the stage for the exemption to end for all countries by Aug. 29. In an accompanying fact sheet for the July order, the White House referred to the de minimis exemption as a “catastrophic loophole” used to evade tariffs, funnel deadly synthetic opioids and inundate the country with unsafe or below-market products that negatively affect businesses.
“The minimum loophole was one of the dumbest things this country ever did,” Navarro said Thursday. “If you do your homework, you look around the rest of the world, and nobody comes even close to the $800 de minimis standard. There’s other countries, they’re five bucks, 10 bucks.”
Not everything will be affected by the change. Personal gifts worth under $100 and letters remain under the exemption, senior administration officials said.
(Featured Image Media Credit: Screen Capture/CSPAN)
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