The Trump administration has imposed new tariffs on millions of low-value international shipments, known as de-minimis shipments, entering the United States. These shipments, valued at $800 or less, have historically been exempt from U.S. tariffs. However, in 2024, more than 1.3 billion overseas shipments qualified for de-minimis tariff exemptions. The administration leveraged the International Emergency Economic Powers Act (IEEPA) to enact these tariffs, a move traditionally reserved for emergency sanctions against foreign threats.
The imposition of these tariffs aims to address what the administration describes as "unusual and extraordinary" threats, such as the illicit global fentanyl trade and immigration issues at the Mexican border. Yet, this decision raises questions about the capacity of U.S. Customs and Border Protection to manage the increased volume of shipments.
The use of the IEEPA for imposing tariffs on de-minimis shipments represents a significant shift in its application. Historically, this act was used against foreign dictators or suspected terrorist groups. The Trump administration's interpretation of national security threats has expanded its reach.
"Anyone can develop a good policy, but whether that policy can actually be effectuated is critical," said Nicole Bivens Collinson.
The tariffs were implemented swiftly, with trade experts comparing the process to flipping a light switch. However, the administration delayed the collection of tariffs on imports from China until systems are adequately in place to handle the influx.
"From a technical standpoint, the imposition of the tariffs is basically a light switch. They're on or they're off," stated Daniel Anthony.
This rapid implementation highlights the extraordinary power wielded by the Trump administration over global commerce. Despite this authority, experts suggest that it may take months for these tariffs to take full effect on de-minimis goods due to logistical challenges.
The U.S. Postal Service's suspension of parcel delivery services from China and Hong Kong in February 2024 further complicates the situation. This suspension underscores the broader impact of the administration's trade policies on international logistics and commerce.
"There's a whole infrastructure system set up for normal shipments that come in to the country," noted Nicole Bivens Collinson.
The administration's decision to target de-minimis shipments serves as a reminder of the extensive influence a U.S. president can exert on global trade. The tariffs are expected to deliver an immediate financial impact, though their long-term effects remain uncertain.
"Part of the challenge is [federal] personnel and bandwidth," mentioned Anthony.
As the tariffs take effect, it becomes increasingly important for the U.S. government to ensure that adequate systems and resources are in place to manage these changes efficiently. The delay in tariff collection from China exemplifies the need for careful planning and execution.
"It's like when you get an Uber bill and you forgot to tip, and add it on later," added Nicole Bivens Collinson.
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