Trump Ends De Minimis Tariff Loophole For Low-Cost Imports

President Donald Trump signed an executive order on Wednesday suspending duty-free de minimis exemption for low-value shipments.

According to a statement by the White House, this executive order closes “the catastrophic loophole” that countries have been using to evade tariffs and funnel deadly synthetic opioids into the U.S. 

“Effective August 29, imported goods sent through means other than the international postal network that are valued at or under $800 and that would otherwise qualify for the de minimis exemption will be subject to all applicable duties,” the White House said.

It added that goods shipped through the international postal system, packages will now be subject to either an ad valorem duty or a specific duty. 

An ad valorem levy is a duty equal to the effective tariff rate imposed under the International Emergency Economic Powers Act (IEEPA) that applies to the country of origin of the product. This duty shall be assessed on the value of each package.

Specific duty, on the other hand, ranges from $80 per item to $200 per item, depending on the effective IEEPA tariff rate applicable to the country of origin of the product. 

“The specific duty methodology will be available for six months, after which all applicable shipments must comply with the ad valorem duty methodology,” the White House said. 

U.S. equity markets were trending higher in afternoon trade after the Federal Reserve left interest rates unchanged on Wednesday. The SPDR S&P 500 ETF (SPY) gained 0.23%, while the SPDR Dow Jones Industrial Average ETF (DIA) edged 0.01% higher. The Invesco QQQ Series 1 Trust (QQQ) was up 0.43%. 

On Stocktwits, retail sentiment around SPY jumped to ‘extremely bullish’ from ‘bullish’ over the past day. Meanwhile, retail sentiment around DIA remained in the ‘bullish’ zone.

Read also: Trump Renews Fed Rate-Cut Pressure After Surprise 3% US GDP Jump

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