WASHINGTON, DC – President Donald Trump has signed an executive order ending duty-free treatment for low-value imported goods, effective August 29. The change eliminates the so-called “de minimis” exemption, which had allowed most shipments under $800 to enter the U.S. tariff-free with minimal inspection.
The White House says the policy had been exploited to import illicit narcotics, counterfeit items, and below-market goods that hurt American workers. Nearly 90% of all cargo seizures in FY2024 came from de minimis shipments, including 98% of narcotics cases. The new rule applies full tariffs to eligible shipments and was enacted ahead of a broader statutory repeal set for 2027.
The U.S. cotton industry has supported closing the loophole, citing heavy competition from foreign-made textiles entering duty-free under the exemption. Industry leaders say these shipments, often misdeclared or undervalued, undermine cotton prices and violate the spirit of trade protections.
Cotton groups, including the National Cotton Council, have asked for increased enforcement, arguing the change is necessary to support farm income and stop tariff evasion.