Ending tax-free exemptions for imports from China is disrupting U.S. e-commerce and air cargo volumes, with significant operational adjustments in response.
At a Glance
- The Trump administration has ended the “de minimis” tax-free exemption for low-value goods imported from China.
- The move closed a loophole that allowed e-commerce giants like Shein and Temu to ship millions of packages under $800 to the U.S. duty-free.
- The policy change has caused a more than 10% drop in air cargo volumes from Asia to North America.
- The action is part of a broader “America First” trade strategy designed to level the playing field for American businesses.
Closing a Massive China Trade Loophole
In a decisive “America First” move, the Trump administration has ended the “de minimis” trade loophole for goods imported from China. The policy change, which took effect on May 2, 2025, eliminates the tax- and tariff-free treatment that had been given to packages valued at under $800.
The loophole was a massive boon for Chinese e-commerce giants like Shein and Temu, which used it to ship millions of individual packages directly to American consumers every day, bypassing the tariffs and duties that American retailers have to pay. The administration’s action is designed to level the playing field for U.S. businesses.
A Shock to the Air Cargo System
The immediate impact of closing the loophole has been dramatic. According to the International Air Transport Association (IATA), air cargo volumes from Asia to North America plunged by more than 10% in the month after the policy was implemented.
The disruption has forced a major realignment for the companies that had built their business models around the loophole. As reported by the New York Post, the e-commerce company Temu has already ceased all sales of Chinese-sourced goods to the United States in response to the change.
A New Trade Reality
While the move has caused short-term disruption, it is a necessary step in creating a fairer trade environment. The previous policy gave a huge, unfair advantage to foreign companies, allowing them to undercut American businesses that play by the rules.
“If shippers can’t sell their goods because of tariffs, that’s bad news for the macroeconomic picture and the need for airfreight,” Niall van de Wouw, chief airfreight officer at the analytics firm Xeneta, said. The policy shift is forcing a much-needed re-evaluation of global supply chains and creating a new reality for e-commerce companies that have long relied on the de minimis loophole to dominate the U.S. market.
Xeneta's latest report finds that reassessing this year's air cargo market outlook is meaningless due to trade uncertainty caused by the Trump administration's tariff hikes. https://t.co/esZ0R0TfEz
— Supply Chain Dive (@SupplyChainDive) May 5, 2025
