The Duty-Free Loophole on Cheap Goods From China Closes Friday. Here's How It Will Affect Your Wallet. Since 2016, the de minimis provision has allowed items worth $800 or less to be imported into the U.S. without paying tariffs.

Temu, Shein, and other low-cost China-based retailers are increasing prices as the de minimis loophole expires on Friday.

Earlier this month, President Donald Trump signed an executive order (EO) that eliminated the duty-free provision on goods worth $800 or less imported from China and Hong Kong. The EO states that it is "a critical step in countering the ongoing health emergency posed by the illicit flow of synthetic opioids into the U.S."

The order goes into effect May 2, 2025, at 12:01 a.m. EDT.

Related: Amazon Launches a Bargain Shop With Most Items Under $10: 'Ultra-Low Prices'

What is the 'de minimis' provision?

Low-price online retailers like Temu and Shein have been using the trade provision (available since the 1930s) to help them grow in the U.S.—and helping China-based e-commerce companies offer lower prices than products made stateside.

The provision allowed packages worth less than $800 to be sent to the U.S. duty-free.

According to U.S. Customs and Border Protection Agency data, the U.S. processed more than 1.3 billion de minimis shipments in 2024 worth more than $48 billion. For comparison, 10 years ago in 2015, that number was 139 million.

How much will prices go up?

According to the EO, a duty rate of either 30% of its value or $25 per item will be added (increasing to $50 per item after June 1, 2025).

The difference in cost is based on how the item(s) are shipped, according to the New York Times. If a package is sent through DHL or FedEx, it could be up to 145 percent, making a T-shirt that previously was $10 now cost $24.50. U.S. Postal Service shipments will see a 120% tax on the value of the items, or $100 per package.

The Trump administration notes that this is in addition to the previously announced tariffs on China, now as high as 145%.