Americans Face Higher Prices as Shipping Loophole Closes

At Chicago’s O’Hare International Airport, parcels slide down ramps after being scanned by US Customs and Border Protection, marking a new era for shoppers and businesses alike.

For years, many Americans enjoyed the benefits of a shipping rule known as the “de minimis exemption.” This policy allowed goods valued at $800 or less to enter the US without paying import duties and with minimal inspections. As a result, low-cost Chinese e-commerce platforms like Shein, Temu, and AliExpress could easily send everything from clothing to electronics directly to US customers, reshaping shopping habits across the country.

However, this loophole officially closed just after midnight on Friday, signaling significant changes for both consumers and retailers. Now, a baseline tariff—potentially as high as 145%, depending on the carrier—will apply to many Chinese imports. This could more than double the price of popular bargain products that Americans have come to rely on.

The end of the de minimis exemption is expected to have a noticeable impact on everyday shoppers. What once seemed like a complex trade policy is now likely to show up directly on receipts as increased costs.

Major shipping companies such as UPS, FedEx, DHL, and the United States Postal Service say they are ready for the new regulations. Customs and Border Protection officials also report they are prepared to enforce the changes and conduct more thorough package screenings.

But it remains to be seen whether the average American consumer is ready for the shift.

A Surge in E-Commerce

Earlier this year, when the exemption was first lifted for goods from Hong Kong and China, there was immediate disruption. The USPS temporarily halted deliveries from China, and packages that did arrive often took longer and lacked tracking updates.

The scale of the issue is enormous. According to congressional research, over 80% of US e-commerce shipments in 2022 fell under the de minimis rule, with most originating from China. Customs officials process nearly 4 million of these shipments daily, amounting to 1.36 billion packages in the last fiscal year alone.

Many shoppers, especially those on lower incomes, have turned to platforms like Temu and Shein as US-made products become less affordable. Research shows that about 48% of de minimis shipments go to the lowest-income zip codes, compared to 22% to the wealthiest areas.

With the rule now ended, some companies have already started to raise prices. Shein, for example, recently notified customers that operating costs have increased due to new tariffs and global trade rules, resulting in price adjustments. Temu is shifting toward local fulfillment, encouraging more US-based sellers and promising to keep prices stable during the transition.

Rising Costs for Shippers and Consumers

Shipping companies are also bracing for higher costs. DHL, for instance, has increased staffing to handle the expected surge in package inspections and customs clearances.

Goods from China and Hong Kong sent via UPS, DHL, or FedEx now face a baseline 145% tariff, plus any additional product-specific charges. USPS shipments are subject to a 120% tariff or a flat $100 fee per item, which will rise to $200 in June.

Political and Economic Implications

Supporters of the former president, who pushed for ending the exemption, say they are willing to accept economic disruptions in support of his policies. However, recent polls show that nearly 60% of Americans believe these policies have worsened economic conditions, with many pointing to rising living costs.

As the new tariffs take effect, the impact will soon be felt in households across the country, especially among those who have come to rely on affordable imports.

“It’s a big deal,” the former president said in a recent meeting, referring to the end of the de minimis exemption, which he called “a big scam.” He added, “We’ve put an end to it.”

Now, as Americans adjust to the new rules, the true effects of this policy change are just beginning to unfold.