The U.S.-China Trade Deal: What It Means for E-Commerce and the De Minimis Exemption

The recent U.S.-China trade deal has made headlines for its impact on tariffs between the two nations. However, it has conveniently left out one critical aspect: the de minimis exemption for e-commerce shipments from China, significantly affecting businesses and consumers alike. The omission of this provision raises critical questions about the future of cross-border e-commerce operations and the regulatory environment that surrounds them.

Understanding the De Minimis Exemption

The de minimis exemption is a vital aspect of international trade that allows goods valuing $800 or less to enter the United States duty-free. Introduced to facilitate simplified customs procedures, this exemption has been a lifeline for many small businesses, especially e-commerce giants from China, such as Shein, AliExpress, and Temu. The dramatic increase in the shipment threshold from $200 to $800 back in 2016 led to an exponential rise in imports, with claims for the exemption skyrocketing by over 1,000% by 2023.

However, under the previous administration, concerns arose regarding customs backlogs and illegal activities associated with low-value shipments. In response, the decision was made to close the de minimis exemption specifically for imports from China and Hong Kong, commencing May 2, 2025. This action imposes heavy duties on e-commerce shipments using the Universal Postal Union, such as the USPS, of up to 120% of the shipment value—an obstacle that could stifle the growth of e-commerce in the U.S.

Impacts of the Recent Trade Agreement

Despite the recent trade agreement that saw a temporary reduction of reciprocal tariffs—dropping U.S. tariffs on Chinese goods from an astonishing 145% down to 30%, while China reduced theirs from 125% to 10%—the omission of any provisions to restore the de minimis exemption has left many wondering about the repercussions for the e-commerce landscape.

The absence of an exemption for Chinese shipments means that small-value products are still subjected to exorbitant duties, making it financially unviable for platforms like Temu to offer direct sales to U.S. consumers. This lack of duty-free status directly impacts their operational capabilities, limiting access to consumers who are increasingly accustomed to the affordability of low-value imports.

While the recent tariff reductions may have positively affected tech stock movements, the unresolved status of the de minimis exemption suggests a deeper ongoing tension within U.S.-China trade relations. As discussed in the blog Three Strategic Moves by China’s Xi, until these trade hurdles are addressed, e-commerce companies are likely to face a challenging environment that hampers their ability to compete in a market increasingly driven by consumer demand for low-cost goods.

The Future of the De Minimis Exemption

Looking ahead, the broader strategy seems to hint toward completely closing the de minimis exemption for all countries, but for now, it remains selectively applied. With the continued focus on tightening imports from China and the looming responsibilities of duty collection, the landscape clearly illustrates the U.S. government’s intent to keep a close eye on its trade relationships and safeguard against perceived threats.

In summary, while the U.S.-China trade deal may have reduced tariffs, it has unfortunately left the de minimis exemption closed for e-commerce shipments from China. As long as these heavy duties remain in place, businesses and consumers will likely continue to feel the impact of these trade policies, raising critical challenges for the future of e-commerce in the trans-Pacific relationship.