The de minimis debacle – are we ignoring the real issue?

De minimis is one of the many trade policies at the forefront of conversations amid the second Trump presidency, and proposed changes to the provision are sparking debate around the potential impacts on supply chains, e-commerce, consumers and the like. Amid the arguments in favour of maintaining the exemption to ease procedural burdens and preserve low costs for consumers, where is the argument in favour of product integrity and ethical sourcing?

There is an ongoing push and pull between profitability and sustainability as businesses (and their suppliers) are caught between short-term financial gains and long-term supply chain integrity. As a result, sustainability efforts often remain superficial, serving more as a compliance check rather than a core business strategy that results in genuine impact. The de minimis debate sheds light on where our priorities lie as an industry, and why that urgently must change.

The deal on de minimis

"For decades, de minimis has been positioned as a trade facilitation tool, allowing low-value imports to bypass customs duties and inspections. In reality, it has created a regulatory vacuum—a loophole that enables fast, cheap, and often unchecked supply chains," EiQ Customer Success Director JP Stevenson said.

Nearly 100 countries implement de minimis provisions, which exempt low-value shipments from standard customs procedures and tariffs. In the U.S., this threshold is set at $800, meaning goods imported into the U.S. valued below this amount are not subject to the same regulatory scrutiny as higher-value imports. While this provision was enacted with the aim to ease trade restrictions and help consumers, the Biden administration said the exemption has been abused, as an influx of de minimis shipments in the last decade has created challenges around enforcing trade laws and stopping imports of fentanyl in the U.S.1 In fiscal year 2023, 85% of the shipments U.S. Customs and Border Protection seized for health and safety violations were small packages, according to the CBP, containing ‘dangerous materials that could cause serious harm.’ “We see a lot of unregulated merchandise that’s not approved by the FDA coming into our port,”said Chief Supervisory CBP Officer Eric Zizelman at the Port of Cincinnati in a 2024 CBP report. 

De minimis shipments account for 92% of all cargo entering the U.S. as of 2024, with customs processing nearly 4 million de minimis shipments per day, the CBP reported, and that figure is continuing to grow. The Trump administration has since signaled it would suspend the exemption, creating backlash from those in favour of easing commerce and keeping prices low for consumers.2

The risk of exemptions cannot be ignored

While de minimis provisions allow e-commerce and fast fashion from businesses such as Shein, Temu and even Amazon to thrive and maintain operability, the treats to responsible sourcing and ethical trade remain prevalent. The truth is in the data. We know that supply for these companies often come from countries such as China, which shows high or extreme risk levels for issues surrounding forced labour, child labour, high working hours and low wages, according to audit data collated in EiQ. To this end, the argument in favour of de minimis provisions can perpetuate these risks, as the exemptions can result in issues such as:

1. Reduced oversight: Low-value shipments bypass stringent inspections and compliance checks, potentially allowing substandard or dangerous products to enter the market. 
2. Increased risk: The lack of thorough inspection means hazardous items, such as counterfeit electronics or untested cosmetics, can reach consumers. 
3. Regulatory gaps: The exemption creates a loophole that foreign sellers can exploit, leading to a lack of incentive for compliance with safety standards. 

While it is true that proposed changes to the de minimis exemption can create logistical burdens and increased costs for consumers, the argument should be that it is the responsibility of governments as well as businesses and the supply chain industry to manage, mitigate and remediate the salient risks that continue to violate human rights and create adverse environmental impact.

Perhaps the di minimis debate should remind us of where our focus should shift. There is an urgent need for businesses to reassess and enhance their sustainability strategies to drive product integrity and improve supply chain transparency. Effective risk management, improved data quality and capability and stronger supplier relationships are critical to closing this gap and achieving business transformation where risk remediation is at the foundation. As we move forward, it is imperative for companies to prioritise these areas to create lasting impact and value (for both business and society).

“The core issue is not intention but execution,” the Financial Times said in a recent report. “ESG has been largely an extra layer on top of traditional business models to manage risks and enhance reputations. But this fails to address the fundamental tension between profitability and sustainability. As long as the market rewards short-term gains over long-term resilience, businesses will harm the planet, and markets will destroy the foundations on which they depend.” 

De minimis exemptions or not, getting to the root of production risks and improving working conditions should be at the heart of the business argument. It’s not just about logistics, it’s about accountability. Trade should be efficient but not unchecked.

1Secretary Raimondo Statement on New Actions to Address Surge in De Minimis Shipments | U.S. Department of Commerce

2What is De Minimis and why did Trump end it as part of China tariffs? | Reuters