Home ยป Tax loopholes closed as Trump raises tariffs on low-value imported goods by $800, cutting off tax evasion from Chinese e-commerce giants.

Tax loopholes closed as Trump raises tariffs on low-value imported goods by $800, cutting off tax evasion from Chinese e-commerce giants.

In the recent presidential order by Donald Trump, imposing a 25% tax on imports from Canada and Mexico, and a 10% tax on imports from China, one interesting point to note is the inclusion of low-value goods (de minimis) which were previously exempted from taxes under the international postal agreement dating back to the 1930s. However, Trump has now decided to tax these goods as well.

In the past, purchasing products from international e-commerce platforms like Aliexpress, Temu, and Shein, and importing goods priced below $800 from China, would have been exempt from taxes under the de minimis rule. This has become a loophole in cross-border online sales, allowing products to enter the country without import taxes. The US government’s own figures indicate that by 2024, 1.3 billion de minimis packages worth $48 billion will enter the United States.

Thailand also has a de minimis rule for low-value goods below 1,500 baht. The cabinet recently announced the imposition of value-added tax (VAT) on these goods, while still exempting them from import taxes as before (according to the Customs Department website).

Source – NBC, Fortune

Image from Shein

TLDR: Trump’s recent order includes taxing low-value goods from Canada, Mexico, and China, impacting online cross-border sales, while countries like Thailand impose VAT but still exempt import taxes on low-value goods.

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