The US is plugging a loophole in the trade system called “de minimis” which allowed imported goods under $800 to bypass tariffs and traditional customs processes. This system will end on May 2, and these small packages will now face a 90% tariff and $75 minimum fee.
Many Chinese businesses will take a hit from this, but the biggest fish in the pond is the disruption of the fentanyl trade. Since shipments of drug precursors were abusing this loophole, the flows from China/India –> US –> Mexico will be disrupted. No this isn’t going to eliminate fentanyl, but it will slow things way down.
There haven’t been too many tariff policies to get excited about lately, but we’re going to slot this one down in the ‘win’ column.
