Trump orders closure of loophole on Chinese shipping on May 2

President Trump issued an executive order Wednesday that shuts down a loophole Chinese shippers use to send low-value goods straight to U.S. consumers.

Mr. Trump’s order said the “de minimis” exemption would be closed on May 2, a move with major implications for companies like Temu and Shein that offer low-cost fashion items.

The exception allows parcels worth less than $800 and sent directly to people in the U.S. to avoid duties or closer inspection.

Yet Mr. Trump feared the exception has allowed fentanyl and other drugs to slip into America because parcels weren’t subject to duties or close inspection.

“Many shippers based in the People’s Republic of China (PRC) hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices,” the order says.

Mr. Trump moved to close the loophole in February when he imposed new tariffs on Chinese goods, though he reversed course after it became clear that U.S. Customs and Border Protection and the U.S. Postal Service were not ready for the change.

“The Secretary of Commerce has notified me that adequate systems are now in place to process and collect tariff revenue for covered goods from the PRC otherwise eligible for duty-free de minimis treatment,” Mr. Trump’s order says.

Kim Glas, the president and CEO of the National Council of Textile Organizations, commended the president for clamping down on the de minimis exemption.

“This loophole facilitates 4 million shipments a day to the United States that often hide illegal and unethically made products, unsafe goods and illicit fentanyl and other narcotics that reach our doorsteps,” she said. “Countries such as China currently avoid billions in U.S. duties through the use of de minimis to the United States.”