Trump’s bid to collect tax on small Chinese parcels will cost the US

In the blizzard of trade rules introduced by US President Donald Trump to “Make America Great Again” (Maga), the abolishing of the “de minimis” exemption for Chinese goods – since paused – has proven to be anything but de minimis.

Introduced in the 1930 Trade Act to let in small, inconsequential packages without tariffs, duties and the documentary palaver associated with customs clearance, the de minimis exemption has become highly consequential. Efforts to curtail it have been the subject of no less than five separate pieces of legislation being pushed through Congress since 2023, including Secretary of State Marco Rubio’s Import Security and Fairness Act.

Trump’s February 1 order to immediately abandon de minimis exemptions for Chinese goods had to be paused just days later – to give the Commerce Department “time to make the order workable”, according to Reuters. More than a million parcels had reportedly piled up at New York’s JFK airport with similar snarl-ups reported across the country.

Many involved in international trade have argued for decades that de minimis rules were among America’s smarter sets of legislation. Since 2016, they have applied to packages worth less than US$800, from US$200 before. Many countries also have de minimis rules but none, perhaps, as generous and efficiency-driving as America’s.

The threshold for Australia and New Zealand is around US$600; the European Union’s is €150 (US$156). Countries like Saudi Arabia, Peru, Colombia and Kazakhstan apply thresholds of US$200-300. Others, like Canada, Japan and Indonesia have thresholds below US$100. (And of course Hong Kong applies no de minimis rules at all, since we don’t apply duties and tariffs in the first place.)

As e-commerce boomed, de minimis advantages became clear: the task and cost of inspecting and levying tariffs and duties on low-value consignments was larger than it was worth. Exempting these small-value items from duties and detailed documentation allowed parcels to get to customers much faster, saved tens of thousands of jobs, and billions of dollars’ worth of documentation costs at the border.

  

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