Supporters of Donald Trump should not assume that censoring or ignoring discussions about the De Minimis Exemption will help the United States. In reality, Republicans — and anyone who values a competitive economy — should be pushing back against ending this exemption immediately. It is a key component of U.S. dollar strength and a major factor in keeping prices lower for American consumers.
What’s at Stake
The reality is simple: many goods are no longer made in the U.S. because it’s too expensive. Even in lower-cost states like Mississippi or Arkansas, the federal government’s policies and price controls make domestic production of many items unrealistic. Eliminating the De Minimis Exemption under these conditions will raise prices, hurt consumers, and make the economy less competitive.
This blog often focuses on price controls in all forms — minimum wages, rent controls, tariffs, and other hidden taxes. Among these, tariffs and consumption taxes have the most immediate and far-reaching effects on small and medium-sized businesses.
If the U.S. could fill dollar stores and discount outlets with American-made goods at affordable prices, ending the De Minimis Exemption wouldn’t be a big deal. But that is far from reality.
Minimum Wage Laws and Price Controls
To date, Donald Trump has said nothing about eliminating the federal minimum wage law. Minimum wages — like all price controls — distort the market. They do not help workers long-term, and they increase operational costs for businesses, which in turn raises consumer prices. The true beneficiaries are governments, which collect more tax revenue.
If Trump were serious about creating a freer, more competitive market, he would:
- Eliminate the federal minimum wage, allowing states to set their own policies.
- End federal price-fixing schemes that benefit special interest groups like labor unions.
- Reduce operational costs by removing unnecessary federal interference in commerce.
Without these changes, ending the De Minimis Exemption will function as another federal tax that punishes small businesses and consumers while benefiting the largest corporations.
Why Walmart Wins — and Small Businesses Lose
Large retailers like Walmart will benefit from the end of the exemption. Walmart has the scale, infrastructure, and capital to absorb the changes — and even use them to eliminate competitors.
In Canada, similar tax structures have resulted in fewer small and medium-sized businesses, and very few small and medium-sized banks. When market entry is restricted, competition dies, and consumers have fewer choices.
Price controls and additional taxes hit small businesses hardest because they lack the purchasing power and economies of scale enjoyed by large corporations.
Trump’s Misstep on Property Rights
While Trump has done a reasonably good job in certain areas and has been more transparent than many politicians, his approach to the De Minimis Exemption reveals a misunderstanding of property rights. As a real estate mogul, Trump’s career has been built on leverage and debt. That perspective often leads to policies that prioritize protectionism over free-market competitiveness.
Ending the De Minimis Exemption in the name of stopping “dumping” only makes sense if the U.S. can produce those goods domestically at competitive prices — which, for many products, it cannot. States’ rights should allow for more regional flexibility, and the federal role in price controls should be reduced, not expanded.
The Political Risk for Republicans
Some Republicans might fear that eliminating the federal minimum wage would give Democrats an opening to raise it dramatically in the future. But Democrats already find ways to expand regulations and benefits within the current system. Wages and labor protections can be addressed at the state level, and “right-to-work” laws already exist in many Republican-led states.
The real danger lies in allowing a federal tax like this to remain in place. If Democrats win future elections, they are likely to expand it, adding new layers of bureaucracy and additional price controls that further damage the economy.
A Warning for the U.S. Economy
Small businesses are the engine of capitalism. Destroy them, and you destroy the country’s economic resilience. Ending the De Minimis Exemption will:
- Increase prices for consumers.
- Force small businesses to close.
- Hand even more market share to corporate giants.
Walmart and other large retailers will keep prices low long enough to push competitors into bankruptcy. Once the field is cleared, consumers will face higher prices and fewer choices.
If the U.S. wants to maintain its welfare state and still bring back manufacturing, it must focus on lowering operational costs rather than taxing imports of goods it cannot produce domestically.
The De Minimis tax is one of the most destructive federal taxes in U.S. history. If Republicans want to avoid long-term damage, they must fight to eliminate it immediately.
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