How to Close Loopholes on Chinese E-Commerce and Boost US Retailers
On Feb. 5, President Trump signed an executive order suspending the planned closure of the de minimis loophole, a move that will temporarily spare Chinese e-commerce giants Temu and Shein from new trade restrictions. His administration had previously moved to eliminate de minimis eligibility for imports from China, targeting a rule that allows shipments under $800 to enter duty-free with minimal inspections.
As Daniel Castro and Eli Clemens write in The Hill, this loophole has given these platforms an unfair advantage over U.S. retailers, with a 2023 House Select Committee on the Chinese Communist Party report finding that both companies deliberately structured their international expansion strategies around de minimis to bypass duties.
Although this reversal delays needed reforms, Congress and the administration should still take further action to ensure U.S. e-commerce platforms remain competitive against Chinese rivals.
Among other steps, Castro and Clemens write:
- Congress should direct Customs and Border Protection to dedicate resources, including investment in AI solutions, to strengthen enforcement against efforts to work around de minimis thresholds.
- To stay tough on China while not hurting U.S. companies, Congress should create a carve-out allowing Chinese sellers on U.S. e-commerce platforms to continue using the de minimis exemption on Chinese imports.
- And Congress could create a trusted shipper program for Chinese e-commerce platforms to enable Customs to efficiently process packages from companies such as Temu and Shein.
