2025 January ISSUE
THE CHANGE
OF
THE DE MINIMIS
RULING
Written by ANDREW SIA
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From the Desk of the Publisher
If you look seriously at the cost of de minimis, the cost can be so minimal for every parcel it is entering into the market, it is very vicious and destructive. It is like a worm that can enter our body and start to empty everything inside.
Earlier on in our October 2024 issue, we wrote about “How to Kick the Habit of Fast Fashion.” Later in this issue we will write about “Hidden Cost of Fast Fashion, also known as Cheap Clothes High Price.”
We need to be careful, and we must emphasize the value we have for our product if we are considering bringing them to produce in the United States. I strongly believe that everything has a circle and the de minimis has a vicious circle that can’t be tolerated.
De minimis is a ruling of something that is so low in value that can be exempted in value, and it is so insignificant for any actions as required in the business law. It is exempted from taxation or accounting requirements. In international trade, the de minimis value is a threshold below which imports may be exempt from duties and taxes for any shipment with the value under $800 can be entered into the United States under the de minimis exemption ruling.
China is already known for its cheap packages and in the past decade it has used de minimis ruling as a loophole to ship small packages directly through e-commerce to the hand of the customers. It is using carrier like UPS and US Postal Services without going through any warehouse or distribution center. It started in 2015 from 153 million packages to one billion packages in 2023. The average value of such shipment was $54 in 2023.
It was in 2024, Shein and Temu each ship approximately one million packages per day to the U.S. consumers directly. This volume positioned them to be the top e-commerce shippers in the U.S. In amount, by using simple mathematic, this can mean about $40 billion worth of this small parcels from the two largest e-commerce companies have arrived directly in the hand of the U.S. customers on a yearly basis. This is certainly by no means of insignificant value.
The U.S, government announced a new change of policy effective on May 2 and provoked the de minimis exemption from China and Hong Kong.
Temu stopped direct shipment from China to the U.S. customers and began to fulfill orders from their domestic warehouses in the U.S. to maintain their service and to absorb the impact of the new tariffs.
De minimis is a Latin word and the translation is, “The law doesn’t concern itself with trifles.” It also means that it is too small and insignificant that they are not worth legal or regulatory attention. The de minimis threshold is referring to the minimum value under $800 that can enter the country without declaration for duties or taxes.
We found out that de minimis was a Latin legal phrase as part of the Roman law, and since the early Christianity grew within the Roman Empire, both the New Testament and the church history reflected this legal culture. It is so trifle that they didn’t bother.