If you’re unfamiliar with de minimis in the context of import taxes, think of it as a legal form of tax avoidance for low-value goods.
“De minimis” refers to the minimum value threshold below which imported goods can enter a country without incurring duties, taxes, or formal customs procedures. In other words, it’s a low-value shipment exemption.
When a shipment’s declared value is at or below the de minimis limit, customs agencies generally:
- Waive import duties and taxes
- Allow faster clearance with fewer inspections and less paperwork
- Streamline processing for couriers and postal services
Why It Matters
For Consumers:
- Low-value imports bypass taxes and duties, making foreign goods cheaper.
- Frequent small orders can avoid the higher costs associated with duties.
For Businesses:
- E-commerce sellers can split larger orders into smaller shipments to stay under the threshold.
- Many foreign sellers use it to compete with domestic retailers by avoiding added import costs.
The Policy Shift and Its Impact
Ending the de minimis exemption is not a small change. Many products sold and imported into the U.S. simply cannot be made domestically at competitive prices because of the high cost of doing business here — including labor costs, which are unlikely to fall anytime soon under Donald Trump’s continued preservation of the welfare state.
Thousands of American small businesses rely on imports from places like China. Removing the de minimis exemption doesn’t just add paperwork — it raises costs for both businesses and consumers.
While some products might benefit from added tariffs (for example, when protecting domestic industries that can produce those goods competitively), many items affected by this policy have no viable American-made alternative. The result will be higher consumer prices and new financial pressure on small businesses — with the added irony that much of the tax burden will ultimately be paid by American consumers, not foreign manufacturers.
Tariffs Are Not Candy
Trump may see tariffs as a quick fix or bargaining chip, but mishandling them can have serious consequences. This policy risks slowing the U.S. economy far faster than his administration anticipates. In fact, enforcing these new duties could require growing the public sector to handle the extra bureaucracy.
If Trump truly wants to preserve Social Security and Medicare — both costly, cradle-to-grave welfare programs — he’s going to face a problem: raising costs for consumers while depending on cheap goods to maintain living standards is a recipe for stagnation.
A new consumption tax on items Americans can’t competitively produce at home is self-defeating. Countries like Canada and many in Europe use such taxes to protect certain industries, but that approach also locks them into dependence on low-cost imports from China.
It’s one thing to put tariffs on cars, which can be built competitively in the U.S., but taxing everyday low-cost imports that Americans rely on is a fast track to economic decline.
The Property Rights Problem
Tariffs and taxes are, at their core, property rights violations. In a truly free society, contributions to the government should be voluntary — given willingly to defend against foreign threats and to care for our neighbors through a lean, efficient safety net. In a wealthy nation, that could include hiring foreign labor where it makes economic sense.
But “America First” in its current form includes protecting a massive government welfare apparatus. That’s incompatible with low consumer costs, and the result will be slower growth — or worse, outright decline.
If Trump really wanted to strengthen the U.S. economy, he’d be raising the de minimis threshold, not eliminating it. A higher limit — say, $5,000 — would boost the dollar’s global role, increase international demand for U.S. currency, and support American consumers who don’t want the low-paying jobs this policy is supposedly protecting.
America is trillions in debt. The goal should be getting more of the world dependent on the greenback, not punishing U.S. consumers for buying affordable goods that we can’t produce at home.
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