How De Minimis Reform Could End Fast Fashion's Duty-Free Ride

By Tirsa Parrish•Last Updated: July 17, 2026

Update:

On February 20, 2026, an executive order was signed extending the suspension of the de minimis exemption, requiring almost all imported, low-value packages (previously under $800) to pay duties and taxes, regardless of origin. All shipments, including those from e-commerce giants, are subject to duties, taxes, and enhanced customs inspection.

Closing The De Minimis Loophole: Protecting American Consumers and Workers

De minimis: a latin term meaning “of little importance” refers to something so minor in value or significance that the law usually overlooks it. In trade, the de minimis exception allowed goods valued under $800 to enter the U.S. duty-free. Originally, this exception was designed to simplify regulations for travelers and small purchases. However, it was being exploited by large e-commerce companies, particularly those linked to China, to bypass trade laws, impacting industries like fashion.

We break down how this loophole is affecting the fashion industry, the environment, and American jobs. Read other blogs with a more in depth explanation of the de minimis exception and how it is impacting the fashion industry.

Fast Fashion Dilemma: A Growing Problem

Fast fashion has become a global concern due to its far-reaching negative impacts. From environmental degradation to exploiting labor practices, the rapid turnover of cheap, trendy clothing comes at a high cost. The demand for new styles has also led to an increase in intellectual property theft, further damaging small designers and brands.

E-commerce giants like Shein and Temu have mastered the art of leveraging the de minimis exception. By sending small shipments directly to American consumers, these companies avoid paying import duties, resulting in millions of dollars in lost revenue for the U.S. economy and undercutting American businesses.

President Joe Biden at a lectern speaking about proposed changes to the de minimis exception in 2024 to end fast fashion and enforce trade laws. — Image via cnbc.com

2024: The First Proposal to Close the Loophole

On September 13, 2024, the Biden administration took decisive action to address what it termed “overuse and abuse” of the de minimis exception. The administration’s new measures aim to close the loophole that has allowed Chinese-based fast fashion retailers to flood the U.S. market with cheap goods, avoiding tariffs, and bypassing safety standards.

White House outlined key regulatory changes, including:

Exclusion of Tariffed Goods: Overseas shipments of products that are subject to US-China tariffs are no longer eligible for exemption. This targets fast fashion imports, which exploit these trade laws to avoid tariffs.
Enhanced Data Requirements: New rules will require additional detailed information on shipments, including the 10-digit tariff classification number and the identity of the party claiming the de minimis exemption. This will help U.S Customs and Border Protection more effectively track shipments and block illegal or unsafe goods.

2025 to 2026: How the Suspension Actually Took Effect

China and Hong Kong Lose De Minimis Access First

On April 2, 2025, President Trump signed Executive Order 14256, ending de minimis treatment for goods shipped from China and Hong Kong. The order cited the synthetic opioid supply chain as its legal basis, but its practical effect landed squarely on fast fashion, since a majority of Shein and Temu shipments to U.S. consumers originate from Chinese manufacturers and fulfillment centers. Unlike the 2024 proposal, which targeted tariffed goods and added reporting requirements, EO 14256 removed de minimis eligibility outright for these two countries.

The Suspension Expands to All Countries

On July 30, 2025, President Trump signed Executive Order 14324, extending the suspension beyond China and Hong Kong to apply to all countries. This closed a gap the earlier, China-specific order had left open: importers could no longer reroute low-value shipments through third countries to preserve duty-free treatment. From this point forward, every shipment under $800 required formal customs entry and duty payment, regardless of country of origin, the rule that remains in effect today.

The Suspension Is Confirmed, Not Reversed

On February 20, 2026, President Trump signed an executive order continuing the suspension established under EO 14388. Rather than introducing new restrictions, the order confirmed that the all-countries suspension would remain in place. After roughly six months under the all-countries suspension, some importers had begun anticipating a rollback. This is the action referenced in the update above, and it marks the point at which the suspension shifted from a new policy to the settled baseline described in the conclusion.

The Scale of The Problem

In the last decade, the number of de minimis shipments entering the U.S. has skyrocketed - from 140 million annually to over one billion. This exponential growth has made it increasingly difficult for customs officials to monitor shipments for violations, including counterfeit goods and items that do not meet health and safety standards. The Deputy National Security Advisor Daleep Singh noted, “The drastic increase in de minimis shipments has made it increasingly difficult to target and block illegal or unsafe shipments coming into the US.”

Impact on the Fashion Industry: A Game Changer

One of the most significant impacts of the crackdown was felt by the fashion industry. “Since approximately 70% of Chinese textile and apparel imports are subject to section 301 tariffs, this step will drastically reduce the number of (fast fashion) shipments entering (the U.S. without scrutiny),” said Singh. This move is designed to protect American textiles and apparel manufacturers, who have long been at a disadvantage due to the flood of duty-free, low cost imports.

By closing the de minimis loophole, the administration aims to level the playing field for U.S. manufacturers and ensure that imports comply with U.S. trade laws and safety standards.

A New Baseline for Fast Fashion Imports

The de minimis exemption, once a simplification tool for small purchases, is no longer available to fast fashion importers. What began as a 2024 proposal to close specific gaps in the rule became a full suspension under a series of executive orders in 2025 and 2026, and that suspension remains firmly in place today. A Supreme Court ruling earlier this year on separate tariff authority did not reverse it, and there is no indication from Washington that a reversal is coming.

For Shein, Temu, and other direct-to-consumer importers, this is the new baseline, not a temporary disruption. Every shipment under $800 now requires formal customs entry and duty payment, regardless of country of origin. For U.S. manufacturers and domestic brands, it removes a cost advantage that duty-free competitors relied on for years.

The practical question for the fashion industry now is not whether de minimis will return. It is how sourcing, pricing, and supply chain strategy adapt to a market where every import carries a duty. Brands still relying on low-value, duty-free shipping models should treat that assumption as outdated and plan landed costs accordingly.

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