Executive Order on De Minimis Disrupts U.S. Supply Chains, but Advances Fairer E-Commerce, Says ITIF
WASHINGTON—Following President Trump’s executive order ending the de minimis loophole, the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, released the following statement from Policy Analyst Eli Clemens:
"While the Trump administration frames the President's executive order shutting down the de minimis loophole for Chinese imports as a move to curb fentanyl trafficking, the biggest impact will be higher costs and supply chain disruptions for U.S. companies that rely on de minimis for low-cost imports. However, it is also an important step toward addressing unfair competition in e-commerce from Chinese companies.
By imposing steep duties and shifting compliance burdens onto carriers, the order disrupts a business model that has allowed Chinese platforms like Temu and SHEIN to aggressively undercut U.S. retailers. Yet China's government provides its platforms with subsidies that lower operational costs and support their U.S.-based logistics investments. Chinese platforms are likely to attempt to reroute goods through third countries to maintain cost advantages, but the accompanying EO's mention of Macau as a potential circumvention route signals that transshipment will be the next battleground.
To maximize effectiveness, policymakers should complement this EO with strong enforcement mechanisms, including AI investment for Customs and Border Protection, so that it can handle the surge in small packages it will need to screen."
An ITIF report released yesterday details how the rapid rise of Chinese e-commerce platforms like SHEIN, Temu, and AliExpress is driven by state-backed strategies that give them a distinct advantage over U.S. competitors. This is part of a broader effort to expand China’s global influence, enhance its financial footprint, and strengthen its AI competitiveness to make e-commerce a cornerstone of national power by 2035.
The report also underscores how these platforms exploit U.S. import regulations, raising consumer risks through counterfeit goods and data security vulnerabilities.
Contact: Nicole Hinojosa, [email protected]
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The Information Technology and Innovation Foundation (ITIF) is an independent, nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy. Recognized by its peers in the think tank community as the global center of excellence for science and technology policy, ITIF’s mission is to formulate and promote policy solutions that accelerate innovation and boost productivity to spur growth, opportunity, and progress.
