President Trump signs executive order to impose additional tariffs on China, Canada, and Mexico and end tariff exemptions for low-cost imports, potentially affecting discount shopping apps such as Alibaba, SHEIN, and Temu
China-based discount shopping apps
Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China – The White House
https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/
Imposing Duties to Address the Flow of Illicit Drugs Across Our National Border – The White House
https://www.whitehouse.gov/presidential-actions/2025/02/imposing-duties-to-address-the-flow-of-illicit-drugs-across-our-national-border/
Trump Tariffs Target Loophole Used by Chinese Online Retailers - Bloomberg
https://www.bloomberg.com/news/articles/2025-02-02/trump-tariffs-target-loophole-used-by-chinese-online-retailers
In the case of cheap products imported from overseas, there are cases where the 'costs spent on collecting tariffs' exceed the 'tax revenue that can be collected as tariffs.' In order to avoid such cases, the 'de minimis exemption' is a measure to avoid collecting tariffs on cheap products. In the United States, imported goods under $800 (approximately 125,000 yen) are exempt from tariffs. Shopping apps such as SHEIN, Temu, and AliExpress use this de minimis exemption to import a large number of low-priced products without paying tariffs, so the movement toward regulation is accelerating in the United States and the EU.
EU plans to crack down on imports from overseas platforms like SHEIN and Temu to protect local businesses from a surge in imports - GIGAZINE
On February 1, 2025 local time, President Donald Trump signed a new executive order imposing an additional 25% tariff on imports from Canada and Mexico and an additional 10% tariff on imports from China. The executive order is explained as being intended to address the 'extraordinary threat posed by narcotics imported from abroad, including deadly fentanyl,' but also clarifies that de minimis exemptions will not apply to imports from the affected territories.
It's unclear whether the de minimis exemption only applies to additional taxes on imports from Mexico, Canada, and China, or to all existing trade taxes. A White House spokesman did not respond to questions about the scope of the change. But a trade lawyer said Trump's elimination of the de minimis exemption could apply broadly to existing tariffs on China, Canada, and Mexico.
If this were to happen, it would have a major impact on Chinese online shopping apps such as SHEIN, Temu, and AliExpress. The de minimis exemption is a major factor in these apps being able to sell products at low prices, so if it were to be abolished, it would incur huge costs and they may no longer be able to sell products at low prices. According to estimates by the U.S. Customs and Border Protection (CBP), the de minimis exemption applied to cargo imported by the United States from around the world in January to September 2024 is estimated to be worth approximately $48 billion (approximately 7.5 trillion yen).
Amazon, one of the world's largest online shopping sites, has taken advantage of its strength of delivering products in a short time after purchase, but China-based discount shopping apps such as SHEIN, Temu, and AliExpress have gained an advantage over Amazon in that they take longer to deliver, but can purchase products at low prices. According to estimates by market research firm eMarketer , Temu is expected to sell $30 billion (about 4.67 trillion yen) worth of products to American users in 2025.
A senior administration official briefed on the new tariff measures by the Trump administration cited the fact that the United States is losing huge amounts of tariff revenue and that it is becoming more difficult for customs officials to detect fentanyl being brought into the United States as reasons for removing the de minimis exemption, but did not clarify the scope of the de minimis exemption.
According to a survey by Nomura Holdings, 'small-value cargo eligible for de minimis exemption' exported from China to the United States accounts for more than one-tenth of all exports. According to CBP, the total volume of 'small-value cargo eligible for de minimis exemption' imported into the United States is expected to reach 1.4 billion units in 2024, which is approximately double the amount in 2022. This is believed to be largely due to the popularity of low-cost mail-order apps from China such as SHEIN, Temu, and AliExpress.
In response to the move to repeal the de minimis exemption, Temu is said to be taking measures such as shipping large amounts of inventory to the United States and storing it in warehouses near major cities. In response, Bloomberg pointed out that 'while this will help mitigate the impact of the repeal of the de minimis exemption, it will put pressure on Temu's business model of selling cheap products.'
Amit Khandelwal, a professor at Yale University's Jackson School of International Affairs, said eliminating the de minimis exemption would hurt some consumers.
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