Germana Carillo A new wave of US tariffs on products made in China could have augured a more complicated future for fast fashion, but Trump later suspended them. For the moment
Amidst Donald Trump’s ambitious tariff ambitions on global trade, one suggested policy threatened to have an unintentional environmental windfall. However, fast fashion giants Shein and Temu have proven too potent, having effectively stalled the former president’s attempt to impose new trade restrictions.
Trump originally sought to revoke a trade exemption known as “de minimis” that allows imports of under $800 to enter the U.S. duty-free. But citing logistical issues at customs, the ruling was quickly rescinded. The exemption remains in place for now until the U.S. Department of Commerce establishes “adequate systems” to process and collect tariffs efficiently.
This reversal essentially stops the proposed tariffs, which had threatened largely Chinese discount retailers Temu and Shein.
The impact of the ruling
More recently, Trump temporarily shelved his plan to terminate the de minimis exemption for low-value packages from China. The exemption has long allowed duty-free imports of goods valued at less than $800. The initial move to revoke it created havoc in shipping and e-commerce businesses and prompted the administration to backtrack while the Department of Commerce formulates stronger enforcement measures.
Had the exemption been suspended, over a billion low-value packages from China annually would have been subjected to more intense customs procedures, such as additional documentation and tariff payments. This would have implied longer processing and additional expenses. The policy shift generated considerable backlogs, particularly at JFK Airport in New York, even affecting shipments that had already paid tariffs.
Meanwhile, the exemption suspension severely impacted online retailers like Shein and Temu, whose business model relies on shipping products directly from Chinese factories to U.S. consumers. By leveraging the de minimis exemption, they maintain competitive pricing. The sudden removal of this exemption forced the U.S. Postal Service to temporarily halt package acceptance from China and Hong Kong, creating major disruptions in the sector.
The initial rationale for removing the de minimis exemption was to cut off the flow of fentanyl produced in China and smuggled into the U.S. masquerading as low-value merchandise. Logistics experts warned that the policy shift with so little notice had the potential to overwhelm customs inspection capacity because the agency lacked the infrastructure to process the increased volume of work effectively.
For the time being, the de minimis exemption holds, and fast fashion business proceeds uninterrupted. Ironically, even the U.S. customs system has not been able to keep pace with its implications.
