
David Paul Morris/Bloomberg/Getty Images
Key Takeaways
- The closure of a tax loophole has pushed up prices on popular bargain websites that ship products directly from China.
- The de minimis exclusion applies to packages below $800.
- The White House stated that drug smugglers are abusing this exemption.
If you’re used to “shopping as if you were a billionaire,” then those great bargains on bargain sites such as Temu and Shein will be victims of President Donald Trump’s trade war against China.
A White House Executive Order went into effect Friday closing a tax loophole referred to as the “de minimalis” exemption. The exemption allowed packages with a value of less than $800 to be sent directly from China to U.S. consumers. Discount shopping sites were built on this exemption. These deals are becoming harder to find now that Trump’s tariffs against China are affecting the packages.
Bloomberg reported that both retailers had raised their prices in response to tariffs coming into effect. Some items on Shein were found to have more than quadrupled the price. Temu has stopped shipping items out of warehouses in China and is only offering items that are already in U.S. warehouses.
The immediate increase in prices could be an indication of what is to come for U.S. consumer. Economists expect Trump’s tariffs to increase the cost of living in time. Trade experts say that toys primarily made in China may see price increases and shortages.
The White House said that the exemption hurt American businesses and was abused to smuggle fentanyl, among other drugs.