The U.S. Court of International Trade in lower Manhattan, N.Y., on May 29, 2025. Spencer Platt/Getty Images
The U.S. Court of International Trade on Aug. 13 upheld the Trump administration’s authority to end the de minimis exemption that allowed Americans to avoid paying duty on packages worth $800 or less.
The court held in a new order that President Donald Trump had legal authority to close the exemption, which he previously said was a legal loophole that benefited foreign vendors and criminals. A company had sued over the administration’s policy, claiming the president didn’t have the power to end the exemption.
The policy change, which took effect on Aug. 29, 2025,
that all global parcel imports going forward would be subject to standard U.S. customs duties regardless of value or origin. Gifts worth less than $100 sent by individuals remained exempt.
Congress eliminated the de minimis exemption in an omnibus tax-and-spending bill in 2025, but that measure preserved the carveout until July 2027.
Trump signed Executive Order 14324 on July 30, 2025, ending the exemption, expanding a May 2025 policy that had already removed duty-free status for packages from China and Hong Kong.
The exemption had been in place in some form since 1938 and was last raised to $800 in 2015. Officials said it had become a loophole for traffickers and foreign e-commerce companies.
On Aug. 13, a three-judge panel of the New York-based court ruled against a Michigan-based auto parts importer that had challenged the rescission of the exemption. Detroit Axle argued that the International Emergency Economic Powers Act (IEEPA) did not bestow independent authority on the president to revoke the exemption before July 2027.
The panel found that Trump had authority under IEEPA to end the exemption for low value imports from Canada, China, and Mexico, which he did in a series of executive orders in February 2025.
The IEEPA permits the president to rescind a trade-related “privilege,” even if that law did not allow him to levy entirely new tariffs, the trade court held.
In February, the Supreme Court ruled in Learning Resources v. Trump that the IEEPA does not confer statutory authority on the president to impose sweeping tariffs. The case did not deal with the de minimis carveout.
The trade court said in its new ruling that the president’s authority to “nullify [or] void … exercising any … privilege” does not violate separation of powers principles because the presidential rescission “is not an exercise of the power of the purse, as was the case in Learning Resources, and is not an exercise of the power to legislate” as cited in a 1998 precedent.
The decision means low value packages from overseas will continue to face ordinary customs duties instead of entering the country duty-free.
Trump celebrated the court victory in a Truth Social post.
The exemption is “one of the most DESPICABLE loopholes in American trade policy” that has been exploited by “Fentanyl Traffickers, Counterfeiters, and other Criminals shipping dangerous and illegal products into America,” he said.
Tom Ozimek and Reuters contributed to this report.
