Trump’s Closure of De Minimis - and Fast Fashion

May 5th, 2025

Sadie Zwonitzer

Throughout his first one hundred days in office, President Donald Trump has been renowned for his use (and non-use) of tariffs as a way to make foreign diplomatic and economic demands. His tariffs have frequently been subject to uncertainty, with him taking them off, and then applying them seemingly at random. One nation in which this is not the case is China, in which Trump has placed up to 245% tariffs on the nation's goods. These costs, while harkening to both the United States and China, used to have a source of relief. That lies in the “de minimis” loophole. The loophole, which aided companies like Shein and Temu, allowed for foreign imports to enter the country duty-free. The closure of this loophole will both be messy and consequential.

Trump closed the loophole last Friday, calling it “one big scam” by China. It seems however, that the “scam” might end up being placed on the American consumers, as this closure doesn't just affect China, but also American businesses. Companies like FedEx and UPS have millions of dedicated routes and drivers who deliver these low value goods to Americans across the country. Now that the loophole is closed, however, the demand for these sectors may vastly plummet, resulting in job loss. These economic costs also extend to rising costs for Shein and Temu, fast fashion retailers that Americans usually relied upon for cheap goods. These retailers had previously escaped President Trump’s tariffs because of the low costs of their goods, sneaking past the new law and offering many Americans refuge from the trade war, however, their prices likely will increase after the closure of de minimis, similarly to prices of other companies to compensate for increased tariff costs. No matter which way you slice it, the closure of the de minimis loophole will definitely be messy.