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Trump Ends Major Tax Loophole

April 3, 2025
by The Times Of America

Trump Dismantles Major Online Shopping Loophole as Sweeping Tariffs Take Effect

President Donald Trump has signed an executive order implementing a 30 percent tax on orders under $800 from foreign retailers, potentially transforming online shopping for millions of Americans. 

The order, part of his “Liberation Day” plan, closes the century-old “de minimis” loophole that previously allowed imports valued under $800 to enter the United States duty-free when shipped directly to individual buyers.

The closure of this exception could severely impact companies like Shein and Temu, which ship directly from China and Hong Kong to avoid various import fees. These retailers alone account for nearly 600,000 packages daily among the over one billion de minimis shipments processed annually by U.S. Customs and Border Protection.

Trump stated in the executive order that ending the exception is intended to “combat China’s role in America’s synthetic opioid crisis.” 

The Daily Mail reported that the president had initially eliminated this loophole in early February before temporarily reversing course after consumer complaints about rising prices. However, this delay was only implemented to allow the Commerce Department time to establish procedures for processing shipments and collecting tariff revenue.

Chinese retailers have increasingly exploited this rule in recent years, with Chinese exports of low-value packages skyrocketing from $5.3 billion in 2018 to $66 billion in 2023. 

The reinstated closure means Americans who purchase inexpensive items like $5 shirts, $10 lamps, and $20 shoes from direct-from-China shopping sites will now face higher prices.

Retail experts note that traditional U.S. retailers such as Walmart and Amazon, which ship from domestic warehouses, have operated at a competitive disadvantage compared to foreign rivals who ship directly from China while avoiding import fees.

The announcement comes as financial markets brace for potential volatility. Following Trump’s Wednesday afternoon announcement, futures tied to major U.S. indexes immediately plunged, signaling possible market turbulence when trading opens Thursday morning. The Daily Mail reported that the selloff could potentially wipe trillions of dollars off U.S. stock values, affecting ordinary Americans whose retirement savings are invested in the market.

Global markets tumbled on recession fears overnight, according to the Financial Review. 

Japan’s Nikkei index fell more than 3 percent, South Korea’s Kospi slipped over 1 percent, and Australia’s main index dropped 1.9 percent, heading toward its worst single-day decline since September and erasing over $21 billion.

The Daily Mail outlined that during his White House Rose Garden announcement, Trump unveiled broad 10 percent tariffs with higher rates for specific countries, including 34 percent on China and 20 percent on the European Union. 

Companies dependent on imports were hit hard in after-hours trading, with Nike falling 6 percent, General Motors dropping 3 percent, and tech stocks like Nvidia and Tesla each losing about 3 percent. 

Retailers also suffered, with Five Below tumbling 11 percent and Gap sinking 12 percent.

Trump accused foreign nations of “ripping off” the United States and promised to impose tariffs on imports worldwide in his speech. The White House announced a baseline 10 percent tariff on all imports effective April 5, with higher rates for countries imposing steeper duties on U.S. goods.

Trump confirmed that a 25 percent tariff would be imposed on all foreign cars imported to the U.S. He displayed a chart showing the United States would “charge a 34 percent tax on imports from China, a 20 percent tax on imports from the European Union, 25 percent on South Korea, 24 percent on Japan and 32 percent on Taiwan.”

Trump described the global trade system as one where “our country has been looted, pillaged, raped, plundered” by other nations. 

He condemned “foreign scavengers” and “foreign cheaters” who “ransacked” American factories.

The president has promised that factory jobs will return to the United States due to these taxes.

Canada and Mexico were exempted from Wednesday’s tariff announcement due to existing 25 percent tariffs, excluding goods outlined in the trade agreement from Trump’s first administration.

“They all understand, we’re gonna have to go through a little tough love maybe? But they all understand. They’re ripping us off and they understood,” Trump concluded.

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