While the world debates the merits of President Donald Trump’s tit-for-tat trade war with China, America’s young women are now upset they will have to pay an extra $2 for polyester dresses made by Chinese retailer Shein. This is the result of the Trump administration ending a little known trade loophole called the de minimis exception with China. Research also suggests that eliminating the provision altogether would result in costs ranging from $11-13 billion for American consumers. But the costs of keeping the exception and — allowing China to dump cheap goods into American markets — are far greater.
But first, what is the de minimis exception? The de minimis exception is a trade loophole that allows goods valued at less than $800 to avoid tariffs. This has enabled Chinese retailers like Temu and Shein to sell their ridiculously low-priced goods to American consumers without added levies. The explosion of de minimis shipping and increased popularity of Temu and Shein in America can be traced back to 2016 when Congress quadrupled the de minimis limit from $200 to $800. As a result, de minimis packages increased by 90% over the previous year to almost 225 million parcels.
De minimis goods exploded yet again during Trump’s first term when he imposed steep tariffs on a range of Chinese goods in 2018. Chinese exporters and U.S. importers circumvented these tariffs by exploiting the de minimis loophole, shipping packages directly to consumers instead of traditional trading channels. As a result, de minimis imports rose from 0.7% of U.S. consumer goods imports and 1% of e-commerce sales to over 7% and 5% by 2023. And around 60% of those imports — about 640 million shipments total — came from China. Merchandise from Temu and Shein made up nearly half of those shipments.
Flashforward to 2025 and Trump’s second administration has eliminated the de minimis exception for China. The White House cited the smuggling of synthetic opioids such as fentanyl into de minimis packages as one reason for closing the loophole and hiked tariffs up to 120% starting May 2.
Obviously, this will harm Temu and Shein, as they will face greater barriers to the American market. And that is a good thing. Americans must end their reliance on cheap consumer products from China and opt for made in America goods. Consumers and workers will be much better off as a result.
Shein and Temu have horrific track records on worker’s rights. Shein factory workers have been known to work 75-hour shifts with little time off in crowded sweatshops lacking windows and emergency exits. Shein has repeatedly been accused of violating Chinese labor laws, including by Swiss public watchdog Public Eye. The group found that factory employees at one of Shein’s suppliers are paid per item with neither a basic wage or overtime pay, and that they work 11 hours a day and have one or two free days a month. Shein has also been accused of violating child labor laws. Both Temu and Shein are complicit in exploiting Uyghur forced labor in the manufacture of their products.
And it’s not just factory workers these companies harm. Shein and Temu products have been found to contain high levels of toxic chemicals. Investigators in South Korea revealed that some clothing from Shein contains carcinogenic substance hundreds of times over the legal limit. Shein was also forced to remove a children’s jacket and purse from its site after a third-party investigator in Canada found the jacket contained almost 20 times the amount of lead that is safe and the purse more than five times the threshold.
Shein and Temu’s production models are also completely unsustainable. Because of their mass production of cheap consumer goods, millions of tons of carbon dioxide are emitted per year. That is to say nothing of their other environmental hazards.
While American consumers have been primed to think cheap equals better, that is not the case. There are always tradeoffs to buying low-cost consumer goods, whether that is unfair worker compensation and exploitation, exposure to hazardous waste, poor garment quality and longevity, and environmental degradation. Clearly where Chinese retailers Temu and Shein are concerned, cheapness and efficiency are not virtues, but vices.
By ending the de minimis exception for China, President Trump is taking the right next step in weaning Americans off cheap consumer goods and ending their myriad harms and abuses.
This article appeared originally here.
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