Trump policy may upend e-commerce

President Donald Trump on Wednesday ordered the closure of a loophole that allows retailers to send clothes and other goods from China directly to American shoppers without paying tariffs.

- DANIELLE KAYE PETER EAVIS

But the order could raise prices for consumers and create delays as delivery companies and the United States Postal Service are forced to verify the value of many more packages than they do now, trade and logistics experts said.

The loophole, known as the de minimis exemption, currently applies to goods worth less than $800 (about 27,500 baht). Such goods are allowed to enter the United States tariff-free. Trump's order, which takes effect May 2, removes the exemption from packages from China, the largest source of de minimis shipments, and Hong Kong. Retailers and shippers now worry this will require far less customs paperwork.

By ending the exemption, Customs and Border Protection will now collect tariff revenue on shipments worth less than $800. Trump also said his order would help prevent counterfeiting. He and others have claimed that fentanyl and its precursor ingredients are sometimes shipped to the United States as de minimis shipments.

Shippers in China "hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices," Trump's order said.

Lawmakers from both parties have called for reforms to the de minimis provision.

For too long, this customs loophole has let foreign exporters flood our market with cheap goods and help bring trafficking more effectively past our borders, resulting in factory closures, lost jobs and deaths," Rep. Rosa DeLauro, D-Connecticut, said in a statement.

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