Why It Matters

A recent Congressional Research Service (CRS) report.&text=Source%3A%20PRC%20Customs%20and%20State%20Tax%20Administration.) on Chinese e-commerce exports reveals a fundamental shift in U.S. trade policy with immediate consequences for retailers, consumers, and China's global supply chains. The Trump Administration suspended de minimis treatment for People's Republic of China (PRC) and Hong Kong products effective May 2, 2025, through Executive Order 14256, and Congress repealed Section 321 for all commercial shipments effective July 1, 2027, through the 2025 Budget Reconciliation Act (P.L. 119-21).

The Big Picture

From 2018 to 2025, Chinese exports to the U.S. surged more than 11-fold, from $1.4 billion to $16 billion, capturing a growing slice of the $1.2 trillion U.S. retail e-commerce market. During fiscal years 2018 through 2021, the PRC accounted for 67.4 percent of all U.S. de minimis imports, valued at $228.3 billion, with $149 billion from mainland China and $79.3 billion from Hong Kong. Back in 2016, Congress raised the de minimis threshold from $200 to $800.

Moving first, the Trump Administration suspended de minimis treatment for Chinese and Hong Kong products in May 2025, replacing the duty-free threshold with formal entry requirements and a suite of tariffs, including Section 301 rates at 7.5 percent. By August, the administration extended the suspension to all other countries. Legislative action followed in July when Congress enacted P.L. 119-21, which repeals Section 321 entirely for all commercial shipments, effective July 1, 2027. U.S. Customs and Border Protection (CBP) is launching new entry processes for low-value postal shipments as of July 2026.

Already, measurable results are emerging. De minimis imports fell from 1.3 billion parcels valued at $64.6 billion in 2024 to 942.5 million parcels valued at $48.1 billion in 2025. Exports from China to the U.S. dropped from $22.9 billion in 2024 to $16 billion in 2025. In the first half of 2026, the decline accelerated further, with Chinese e-commerce shipments to the U.S. falling $2.9 billion, or 27 percent, versus the first half of 2025.

Adaptation is underway among major platforms. Temu halted shipments from China and shifted to U.S.-based warehouses and vendors. Shein announced in May 2026 plans to acquire the U.S. clothing brand Everlane, signaling a strategy to embed itself in American retail infrastructure. Restructuring efforts by PRC-tied firms include incorporating in Ireland and Singapore and utilizing warehouses in third countries, presenting a significant circumvention risk.

Political Stakes

For Congress

Whether tariffs and logistics barriers alone can sustain the policy's gains remains a critical question, particularly as Chinese companies seek new routes to U.S. markets before Section 321 is fully repealed on July 1, 2027. Significant circumvention risks exist as PRC firms rapidly adapt their corporate structures and supply chains. Additional enforcement mechanisms or legislative adjustments may be necessary to close emerging loopholes.

For the Administration

Coordination on trade enforcement is evident in the Trump Administration's dual-track approach (executive action on de minimis followed by congressional repeal of Section 321). Success depends on CBP's capacity to process and collect duties on the surge of formal entries beginning July 2026, and on sustained enforcement against circumvention schemes.

For the Public

Higher prices and reduced selection await consumers as Chinese e-commerce platforms reduce direct shipments and shift to costlier U.S. warehouse models. Increased costs for retailers and ultimately consumers will result from the tariffs and entry requirements, though the magnitude depends on how quickly Chinese firms adapt and whether circumvention strategies succeed.

The Bottom Line

Working as designed, the policy has driven sharp declines in Chinese e-commerce exports to the U.S., and major platforms are restructuring their operations. Yet global Chinese e-commerce exports expanded more than 21-fold between 2018 and 2025, and Chinese firms are rapidly adapting their logistics and corporate structures to maintain access to American consumers. Policymakers face a critical question: whether current measures will sustain these gains through July 1, 2027, when Section 321 is fully repealed, or whether Chinese companies will find new routes to U.S. markets before that deadline.

***

Access the Legis1 platform for comprehensive political news, data, and insights.

---

Spot something wrong? Report an issue with this article