Trump will use customs rule for cheap imports for the time being

Trump will use customs rule for cheap imports for the time being

The Trump administration has the suspension of the so-called de-minimis regulation delay. This regulation allows packages worth less than $ 800 to the country. In particular, this benefits inexpensive shopping pages from China, which offer a variety of products, from fashion to furniture.

Effects of the delay on e-commerce

The delay will continue until the time at which "appropriate systems are available" so that the Ministry of Commerce can "process and move in fully and quickly". This measure was announced as part of a new executive order.

Risks for Chinese e-commerce platforms

A suspension of the long-term de-minimis regulation would have serious consequences for Chinese e-commerce sites such as Shein, Temu and Aliexpress as well as for US platforms such as Amazon, Ebay and Etsy, the products from China. The regulation was part of Trump's announcement of a comprehensive customs of 10 % on China this week, a step that could change global trade together with retaliatory tariffs from China.

The business model of the Chinese companies

Chinese e-commerce providers have built huge business models around this liberation. The loosened restrictions and tax relief for cheap products made it possible for more than a billion packages to be reached in the USA in 2022 more than a billion packages at affordable prices for consumers

The reality of the customs and border protection authorities

The delay is another example of how Trump's guidelines encounter reality, says Clark Packard, research scholarship holder at the libertarian Cato Institute. Experts have already noticed that the suspension would overwhelm the US customs and border protection authority. According to a report by the congress research service, more than 80 % of the total US E-commerce programs were de-minimis imports in 2022

challenges in logistics

"You should have a lot more staff on site," said Packard. "The reality is that the customs and border protection authority is currently simply unable to deal with the package volume." The executive order did not contain any information on how long the delay would take.

The future of de-minimis control

Packard pointed out that there is no estimate for how long it will take. From a logistical point of view, it would take at least a year to set up a fully functional system, but the delay could also be a negotiation tactic on the market. In order to avoid the possible abolition of the liberation, companies could expand their warehouses in the USA, explains Christopher Tang, Professor of Global Supply Chain Management at the University of California, Los Angeles.

You could ship large quantities by customs and then send the products within the United States, but customers would have to continue to pay import tax.