A little-known trade provision is ending, and it will likely upend business for e-commerce companies and raise prices for consumers. De minimis has allowed companies to avoid duties on shipments to the U.S. that are worth $800 or less. It’s a program that many companies, especially e-commerce giants, Shein and Temu, have taken advantage of to keep prices low. WSJ’s Shen Lu explains how President Donald Trump has now ended that program for products from China and Hong Kong. We also speak with the CFO of shoe company Kuru about how the new rules could change their business. Jessica Mendoza hosts. Further Listening: -Shein: Fast Fashion, Slow IPO -The Billionaire Caught Between Trump and China -China Unleashes a Trade War Arsenal Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
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President Trump's trade war with China has made its way into your online shopping cart. Some of the most popular websites where you might find yourself paying more are Shein and Taimou.
Has anyone looked at their Shein cart this morning?
My $18 free shipping Taimou order that I tried to place last night had a $27 import charge. Import charge is $55.11. So I just watched the prices in my Shein cart triple.
These added charges are largely a reaction to the Trump administration's high tariffs on goods from China. Right now, those tariffs are hitting an average of 165 percent. But there's a second reason the price tags on these products are going up, and it has to do with something called de minimis. De minimis. De minimis. De minimis.
It's called the de minimis threshold.
The Trump administration is ending today something called the de minimis exemption. It kind of sounds like a Harry Potter spell, but it's actually a trade provision. Basically, it means companies don't have to pay taxes on goods they're bringing into the U.S. as long as those goods are worth $800 or less.
But as of today, the Trump administration has taken away this tax exemption for goods from China and Hong Kong.
Now for these companies, the elimination of De Minimis is basically a double whammy. They didn't have to pay taxes when they sell to U.S. consumers. Now they have to, and the amount of tax is exorbitant.
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, May 2nd. Coming up on the show, what a world without De Minimis means for e-commerce. Did you realize that you were going to have to be an expert on De Minimis?
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