Known as the De Minimis exemption, Chinese shopping giants Shein and Temu are used to send millions of packages tax-free each year, helping to keep American products priced low. However, the exemption is also important for markets like eBay and Etsy, which allow Americans to purchase items from China-based sellers.
Also, if the measures were scrapped, Amazon had a negative impact on Amazon and recently launched a division of affordable Chinese-made products that compete directly with Temu and Shein. Amazon did not immediately respond to requests for comment.
Trump attempted to scrap the De Minimis provisions on Chinese packages in February via another executive order, but he quickly reverted the measure after it became clear that U.S. customs and border protections did not have the resources to inspect millions of additional packages a day and ensure that the correct related duties were paid. According to his new order, the tax exemption disappears on May 2nd, with CBP saying it is preparing for several weeks.
Ram Ben Tzion, co-founder and CEO of digital shipping review platform Publican, believes Trump intends to use De Minimis to negotiate De Minimis in negotiations with China.
“The size and importance of this is huge when it finally takes effect,” says Ben Thion. “It could dramatically change e-commerce. It could dramatically change some of the giants we’ve known over the past few years.”
However, some tech companies, particularly those already established in areas such as logistics and data analytics, may see opportunities in Trump’s trade policy. Almost immediately after the tariffs were announced, defense contractor Palantir published a blog post promoting artificial intelligence services that integrate “a wide range of data sources” to ensure that “custom-related decisions consider the full operational context.”
Jay Gerald, director of customs and logistics at Mexico City-based technology and logistics startup Nuvocargo, says that as much as he “hate tariffs,” they have created more demand for his company’s services. Nuvocargo operates as a freight broker between Mexico and the US, selling software that helps customers get their goods across US borders. It also helps to process customs documents. The company is currently forecasting an increase in customer activity in April, May and June, with tariffs expected to boost its business.
Still, last month was “confusing” for importers and shippers, Gerald says. In early March, Trump slapped a 25% tariff on Mexican and Canadian imports, but returned it a few days later. During that short time, Gerald says that if the cargo truck crossed the border, the importer paid the fee.
“If they imported $100,000 worth of drinks that day, they would have paid $25,000 on duty. If the truck crossed a day later, it would have disappeared.”
