Trump wins legal battle to keep cheap imports subject to tariffs

A federal trade court's decision on Thursday grants President Trump the authority to keep cheap imports, including those from Chinese retailers like Temu and Shein, subject to tariffs. This ruling is significant as it represents a victory for the Trump administration's trade agenda following a legal setback that prompted officials to seek alternative methods for imposing tariffs.

The Court of International Trade's ruling confirms that Trump's suspension of the de minimis exemption, which permitted packages valued at $800 or less to enter the U.S. duty-free, can persist. President Trump celebrated the victory on social media, criticizing the loophole that allowed duty-free packages to enter the country with minimal scrutiny, which he alleged was exploited by criminal activities such as smuggling fentanyl and counterfeit goods.

The U.S. Customs and Border Protection reported that suspending the exemption in 2025 generated approximately $1 billion in duties. The exemption, established in 1938 to prevent the expense and inconvenience of collecting duties on low-value shipments, has seen increased usage due to the growth of e-commerce. The Trump administration initially restricted the de minimis treatment to shipments from China and Hong Kong and subsequently broadened the policy globally.

The Court of International Trade's unanimous decision affirmed that the International Emergency Economic Powers Act (IEEPA) permits the president to terminate specific benefits, including the exemption, as the statute itself classifies the duty-free treatment as a privilege. The ruling primarily addresses whether the IEEPA can be used to void the de minimis exemption, the central issue in the Court of International Trade's ruling.

The decision will determine whether Trump can maintain the exemption suspension until it expires next July. Congress removed the de minimis exemption in the Trump administration's tax cut and spending bill, set to take effect in July. This decision will likely impact businesses like Temu and Shein, which rely on low-cost imports, leading to increased costs and potential changes in their supply chains.

The administration's strategy to curb tariff-free cheap imports appears to be on track, with similar measures being implemented globally, including in Europe.