I ordered an FPGA development board from China last month that unfortunately didn’t make it out of the country before tariffs/end of de minimis set in. So it’s now sitting in a consolidation warehouse overseas while I figure out what to do with it. Paying almost double its value in taxes alone just kills its viability as a hobby, and sourcing it overseas is the only way to get hands on hardware without shelling out $2,000+.
There’s a whole cottage industry over there where they harvest semiconductors from junk/e-waste and turn them in to usable products again. I assume that’s where the actual FPGA chip came from.
MSFT_Edging · 10h ago
I had to delay learning PCB design during Covid because I couldn't source any parts.
Now prototypes will cost at least 2x, if not more.
These tariffs are essentially shooting US technology development in the foot. Chinese engineers will have the greatest access in the world to manufacturing and components, while engineers in the US who don't already have a large company to bankroll them will just find something else to do.
I had some projects in the pipeline that I might not bother with now. It's simply not worth the money. US PCB fabs are probably even worse, they still get a lot made overseas, but now they also hate you because they exist to do large orders for the DoD, not joe schmo democratizing hardware.
mrybczyn · 10h ago
this exact 'cottage industry' you speak of is what existed in north america and started little conpanies like Apple, etc.
The sad fact that we lost all of these because of the entire electronics supply and design chain moving to Taiwan and China, is why we are where we are. These barriers might bring some back, who knows.
Ultimately global open borders, for goods and services, had their own issues. For example open competition between free market economies and centrally planned economies creates rather obvious advantages of scale that are skewed...
hshdhdhj4444 · 10h ago
> The sad fact that we lost all of these because of the entire electronics supply and design chain moving to Taiwan and China, is why we are where we are. These barriers might bring some back, who knows.
And yet almost all the actual design was still happening in the U.S.
It’s almost like the origin of the components didn’t matter. Access did.
And even if the origin might have shifted the fact that access increased made Americans stronger in Tech not weaker.
Right now, we don’t have origins of manufacturing nor access. Even if some parts of the industry does reshore to the U.S., the access will still be limited primarily to those parts of the industry that re-shored and even there access would be lower due to higher costs.
It’s incredible how America had the fastest growing major economy, was the leader in nearly all the industries of the future, has insanely high per capita income that continues to grow, and decided to throw all that away all because it refuses to undo the decisions that allow all that growth in wealth to accumulate with a tiny minority of the country.
malfist · 7h ago
I agree entirely with what you said. To extend on your point, we _want_ the higher order manufacturing here. Not the lower order.
Think for a second. Would you rather there be a new aluminum plant in the US? Or would you rather there be another successful airplane manufacturer. In no world does prefering the aluminum plant get you anywhere close to the same GDP of a airplane factory
mindslight · 3h ago
We want both. We don't need nearly enough airplanes to employ everyone assembling airplanes. The airplane workers and engineers being in close contact with the aluminum workers and engineers will enable innovation from both. And if it becomes harder to get aluminum from another country, having the domestic plant means we can keep making airplanes. But of course Trump's senile "plan" will get us neither.
_DeadFred_ · 6h ago
Bro, Trump's tariff plan from 1988 TOTALLY reflects what 2025 America needs to do.
Was there a real example of centrally planned economies after the fall of the ussr? More like centrally guided: Korea, Japan, China are all equally good examples.
hypeatei · 9h ago
> is why we are where we are
Which is where? A country outpacing everyone else in growth and recovery after COVID?
This assumption that globalism = bad because we don't have people assembling electronics for $10/hour is strange. Does some of that need to be reshored for national security? Definitely, and that's why we have the CHIPS act but Trump is trying to kill it so I'm not really sure what these tariffs are trying to accomplish and I don't think this administration does either.
invokestatic · 10h ago
I am exploring whether PCB prototypes can be imported tariff-free under HTSUS 9817.85.01. However getting a tariff broker to figure out how to do this properly might also be expensive.
MSFT_Edging · 10h ago
The big pain point for me would be the assembly service. Smaller designs I don't mind putting together by hand, I have a toaster oven and low-temp paste.
If I'm designing something that would need 100 units though, that's going to send a design cost from reasonable to out of reach rather quickly.
mindslight · 7h ago
This feels like the exact kind of thing Chinese vendors/marketplaces are going to be figuring out at scale, but that still won't stop them from doubling their prices even if they do avoid paying many of the high tariff taxes. Market disruptions are an excuse to raise prices (see the first round of Trump inflation from the completely inappropriate economic response to Covid), and I wouldn't be surprised if the shipped-direct-from-China business drastically grows because of the recent tariff tax changes.
Another perverse incentive is that to get items sitting in a US warehouse (eg Amazon), the seller has to pay the high tariffs before they can even start selling them, while also hoping that tariffs aren't lowered before they can sell them all (and the expectation is that Trump is going to have to dial back this idiotic "plan" of his some time). Meanwhile the seller of a direct shipped item has a confirmed sale and cash-in-hand by the time the shipment gets to the border. So I expect the selection of US-stocked items is about to drop dramatically, and the poor economic conditions and abjectly poor leadership is going to leave many people not feeling too bad about (or even gleefully embracing) shopping direct.
derbOac · 10h ago
I think what you're referring to is insidious and not getting anywhere near enough attention.
There's constant clamoring about increasing STEM engagement and then they go and kill off accessibility of tech.
Tech access is important all the way up and down the cost spectrum. The way people — kids as well as adults — get interested in this stuff is by having things to play with and use. You have an idea and want to work on a prototype? Now it's more expensive. Want to build something with your kid to get them interested in hardware? More expensive.
infecto · 10h ago
Disagree. The way de minimis was being exploited created a market distortion that unfairly favored foreign companies. I get that there are niche cases where it causes real pain, and that sucks but calling it insidious feels like overkill.
I support free trade, and in an ideal world we’d have no tariffs at all. But enforcement around imports is hard. You still need some mechanism to regulate goods entering the country, and duty taxes are a practical tool for that. When a U.S. retailer imports goods from China, they pay duties. When Temu ships a nearly identical product directly to U.S. consumers under de minimis, no one pays anything. That’s not a level playing field.
hshdhdhj4444 · 10h ago
So your concern appears to be that the current system doesn’t allow a U.S. retail middle man to take their cut?
I didn’t realize there was so much sympathy for non value providing middle men in the U.S.
I do actually agree with the de-minimus issue and that the system needed to be redone, but not because I think more Americans should be spending their lives being middle men leeching money off the American user, but because the de-minimus exemption was distorting the markets leading to highly inefficient individual packages instead of bulk packages being shipped.
But the problem isn’t the elimination of de-minimus. If that had been eliminated a year ago, a $1000 import from AliExpress would see a $100-$200 additional cost which while not ideal would have been reasonable.
The problem is the raising of tariffs to extremely high levels that mean that the $1000 goods now carry a $1100-$1500 duty on top.
infecto · 9h ago
You're misrepresenting my point.
This isn’t about protecting "middlemen" for the sake of it, it's about applying consistent rules across different channels of commerce. If a domestic retailer has to pay duties to bring in inventory from abroad, but a foreign seller can ship the same item directly to a U.S. consumer with no duty via de minimis, that's a structural arbitrage opportunity, and yes, that does distort the market.
Whether the intermediary adds value or not is a fair debate, but the real issue is the system favoring one pathway over another based on a technicality, not merit. If you want to argue for a globalized market with no tariffs or friction, I’m sympathetic to that. But that’s not what we have, and pretending that eliminating de minimis while raising punitive tariffs are the same problem is a conflation.
I’m with you on criticizing high tariffs — retaliatory or otherwise, especially when they become a blunt weapon. But de minimis wasn't a free-market policy, it was an exploit. Fixing it doesn’t mean embracing protectionism, it means closing a loophole that had gotten too large to ignore.
derbOac · 9h ago
I guess my reactions are:
1. I guess I think mechanisms for regulating goods entering the country should be based on specific articulated harms, and targeted through law enforcement or tariffs with a specific harm reduction goal. It's a bit absurd to me that China is being hit with a giant tariff based solely on source of product, and things like tainted Indian generic drugs continue to be an ongoing issue with actual medical harms.
2. I'm not sure why US consumers should be paying a middleman. If you can buy a product direct from the source, why not? The gains from a middleman should be intrinsic to what the middleman can bring, like savings through bulk purchases or shipping. Maybe more directly, I think tariffs should be eliminated completely, not just de minimis (except for those targeting a specific aim, with articulated goals and endpoint conditions).
3. These discussions have gotten so bizarre to me at some level because the US constitution specifically empowers Congress, not the president, with tariff powers. I don't think they should be allowed to shift those powers to another branch. Grievances about tariffs established by an executive were one of the reasons for the establishment of the US as a separate country to begin with, and just because Congress screwed up one time with tariffs doesn't mean they should be able to abdicate their responsibilities. I think having tariff powers reside with a large distributed body increases the burden of establishing a tariff probably. But this is an entirely different issue from the focus of the article.
infecto · 9h ago
You’re conflating tariffs with duty taxes collected on imports, and that’s a big part of why this conversation gets muddled.
I don’t support broad tariffs either — I’d love a world of free trade. But duty taxes aren't the same thing. They're not necessarily protectionist; they exist to fund the enforcement of customs and import regulations. If we agree that there are things we should regulate at the border, plants, animals, counterfeit goods, etc. then you need a mechanism to fund that enforcement. Duty taxes are that mechanism.
De minimis creates a loophole where foreign companies can flood the market with small direct-to-consumer shipments, bypassing both duties and most scrutiny. A U.S. importer pays duties and follows import regs. Temu doesn’t. That’s not about "harm reduction", it's about uneven enforcement and subsidized noncompliance.
I'm all for optimizing enforcement of small package imports and making compliance easier for individuals and small businesses. But we can’t pretend that zero enforcement cost is viable at scale, or that eliminating duties across the board is somehow neutral in its effects.
If you're arguing for removing all import duties and funding border enforcement from general taxes, fine but say that. Otherwise, it feels like folks just want all the upside of globalization with none of the costs or responsibilities.
macintux · 10h ago
When did “level playing field” become more important than other considerations?
infecto · 9h ago
It’s not that a level playing field is more important than every other consideration, it’s that you can’t have a functional or fair market without one.
If one group has to follow the rules and bear the costs, while another gets a free pass because of a legal loophole, you're not fostering innovation or accessibility, you're just subsidizing arbitrage. That’s not sustainable, and it warps both pricing and incentives.
I’m all for lowering costs and increasing access to STEM tools. But if the policy that does that relies on systematically undercutting domestic importers and eroding trade enforcement, then we should be honest about the tradeoffs. Let’s push for smarter, broader reforms (like targeted STEM subsidies or tariff carve-outs for educational goods) instead of defending a workaround that happened to benefit us temporarily.
rjsw · 10h ago
I was making hobby PCBs 50 years ago, it didn't require importing parts from China.
aziaziazi · 10h ago
> junk/e-waste and turn them in to usable products again.
Could you expend on this? In my understanding (armchair-youtube-expert), seminconductor "recycling" is basically burning the device and to scrap the metallic parts then using as usual cyanide+boiling chloride (or mercury) to extract gold. Then throw away everything else.
The less industrial method involves human dissection of such devices (with pre and post burning) to extract Silver/Cooper
bombcar · 10h ago
There's an entire industry in Asia that takes apart computers and boards and industrial equipment, removes the chips, and resells them. Sometimes they even paint part numbers and such on them by hand.
It can be a source of fake chips, but also a source of chips that aren't made anymore.
reginald78 · 10h ago
China seemed to take chips from obsolete motherboards and turn them into boards to allow reuse of old Xeons, at least for awhile there. I can't imagine those chipsets were still being made so I assume that is what was happening. A lot of those old processors were still quite useful but since the motherboard supply had dried up they were cheap e-waste. I can't imagine that kind of recycled product being made here, not least of which because Intel would probably find a way to sue a domestic company out of existence if they even tried.
MSFT_Edging · 10h ago
Not all recycling. Certain valuable chips are saved for other uses. STM chips are popular for that. You'll also see older Spartan FPGAs repurposed.
echoangle · 10h ago
What’s the definition of loophole? How is shipping small packages without taxing them a loophole if that’s the exact thing the exemption was introduced for? Is driving an electric car and getting a tax credit a loophole too?
infecto · 10h ago
I think loophole is probably appropriate. The spirit of the law was of course low value goods are not worth the burden. The increase to 800 in 2016 was probably a little much but who would have guessed whole business models would run off of this ruling. The spirit is for small shipments, not entire business models running off of it.
iterance · 10h ago
I don't think this is exactly correct. One purpose of a de minimis exemption is to clear the way for small overseas businesses to integrate more easily into the national economy by minimizing border wait times and overhead importation costs on cheap goods / goods only found overseas. It has the dual benefit of reducing customs labor costs for the taxpayer. From an economic perspective, business models like these are a desirable and purposeful consequence.
We focus on businesses like Temu because everyone agrees they sell cheap garbage, but a lot of overseas businesses sell high-quality or even essential goods. (And clearly, for many people, whatever Temu sells is good enough.)
infecto · 10h ago
This rule goes back to the 30s and for most of its history the goal is to reduce administrative burden. The fact that small business around the world might benefit from it is indirect and never the main goal.
We focus on Temu because they are running a large dollar value business on imports that skirt duty tax. The dollar volume is the important piece here as they playing on an unfair advantage.
iterance · 9h ago
If the purpose of the exemption were only to reduce the labor cost of importation, some other scheme (such as prohibiting the importation of cheap goods entirely) would be far more effective. Several other options would be at least equally effective. Factors besides labor are clearly also considered.
In your view, what are the factors in addition to customs labor costs that were weighed in 2016 the choice to increase the de minimis exemption? I'm curious, because you seem to feel very strongly that global economic integration is not one of them.
infecto · 9h ago
I’m not saying global integration wasn’t ever discussed or considered, just that historically, the primary driver behind de minimis was administrative efficiency. You can trace it all the way back to original rule in the 30s. The idea was that the cost of collecting duty on low-value goods often exceeded the revenue collected, so it made sense to wave them through.
That’s very different from encouraging large-scale commercial exploitation. When entire logistics chains are built specifically to stay under the threshold, intentionally bypassing duties that domestic importers would have to pay, that’s a policy failure, not a success. You can absolutely argue that it incidentally helped smaller exporters or increased consumer access, but that’s a long way from saying it was intended to support global e-commerce platforms arbitraging regulatory gaps.
You asked what factors were weighed—labor costs and shipment volume handling, sure. Maybe some light consumer benefit. But "building duty-free pipelines for billion-dollar drop-shippers" probably wasn’t in the memo.
fkyoureadthedoc · 10h ago
> but who would have guessed whole business models would run off of this ruling
Anyone who thought about it critically for like 10 minutes?
transcriptase · 10h ago
I’m convinced that a small proportion of people fundamentally can’t consider beyond first order consequences. Others can’t consider or imagine beyond second order consequences. One could argue third order relies more on domain knowledge than anything, which could explain why career politicians and bureaucrats genuinely can’t fathom the inevitable downstream effects of an action even if blindly obvious to those with business experience.
It’s the same pattern with discussions of rent control. Despite overwhelming evidence that the third-order consequences make things worse for far more people than the first- and second-order effects help, proponents seem unable to reconcile that “preventing rent from increasing” could possibly make housing less affordable.
infecto · 10h ago
The de minimis threshold dates back to the 1930s and has only been adjusted a handful of times—most recently in 1993 and then in 2016. The 2016 increase was substantial, and in hindsight, probably too high. Still, at the time, few could have anticipated just how fully it would be exploited. The business models we’re now seeing at scale—like Temu’s—didn’t meaningfully exist back then. Even Shein was far from the force it is today.
The loophole may have been visible, but the ecosystem to take advantage of it at this level simply wasn’t in place yet. So no, this wasn’t as obvious as you’re pretending it was.
fkyoureadthedoc · 9h ago
> Still, at the time, few could have anticipated just how fully it would be exploited
In 1930? Sure, you couldn't expect them to know that everyone would have a wireless telegraph in their pocket and they'd have cheaper and more skilled Chinese labor/manufacturing available.
In 2016? Really? Amazon was already going full steam. Ali Express was well known. It absolutely should have been obvious to legislators and those that lobby them professionally what would happen. How many people regularly, or even annually, buy items for over $800 from either of them?
infecto · 9h ago
You are either naive or a wishful thinker. Government moves slow and I have zero expectation they would have been able to see the writing on the wall. Again I think $800 was too high of a limit but I also think you give too much credit to your hindsight.
fkyoureadthedoc · 7h ago
Either naive or wishful thinker. No other option.
As far back as the 1950s the textile industry was against raising the de minimis threshold because they wouldn't be able to compete with duty free mail order imports. We keep increasing it. We get SHEIN. Surprised Pikachu, nobody could have foreseen this.
mindslight · 7h ago
Aliexpress was already huge in 2016. And obviously the government could see the volume of parcels arriving via international mail and getting dumped off on USPS, because they did something about that.
daft_pink · 4h ago
Essentially the reason why this is a loophole, is because Chinese companies like Shein and Temu have structured their entire businesses around shipping directly from China and marketing directly to the United States so that a company like Amazon would need to pay tariffs on all it’s goods, because it imports into the US directly and Shein and Temu would have to pay no tariffs.
It makes no sense for the United States to charge 145% tariffs to normal American companies, and then allow a loophole so that large Chinese e-commerce giants essentially benefit by structuring their business to not operate in the United States. The purpose of the tariff’s is to increase American employment not decrease it.
A loophole to minimize administrative burden makes no sense when applied to companies selling tens of billions of dollars into the US every year.
lesuorac · 10h ago
The argument was that grandma would be shipping you nice cookies and it'd be annoying if you had to pay tarriff on receive foodstuff.
Temu is not grandma so that's where the loophole comment comes from. It wasn't meant to be used large-scale commercially where you ship 100 small packages instead of 1 large package to avoid the tarrif.
dharmab · 10h ago
No, the argument for de minimis is that the cost to collect taxes on a $20 parcel is less than the collected tax.
Granted, the US' $800 de minimis, which was created because of a lack of funding to deal with the volume of shipping, was probably a bad decision in retrospect. But removing it entirely is another extreme.
sarchertech · 10h ago
The issue is that when the law was crafted, it wasn’t feasible for foreign companies to directly sell to consumers at scale.
The internet facilitated a direct to consumer model that allows foreign companies to almost completely bypass import taxes.
dharmab · 10h ago
The $800 limit was set during the Obama administration, well after internet direct to consumer sales existed.
sarchertech · 10h ago
Yeah but the scale wasn’t apparent yet. Normal people didn’t commonly order firstly from Ali express in 2015.
If you look at the amount of de minimis goods shipped the year after the amount was raised vs today, they have increased over 10x.
Also the pre 2016 limit was $200, still low enough to allow the temu business model.
Propelloni · 9h ago
The EU generally has a de minimis limit of 150 EUR for custom duties but individual members levy sales tax from the first EUR onward. The USA could do the same. Of course, this would make things more expensive, too, but less so than sinking your trade boat through tariffs ;)
echoangle · 10h ago
So why wouldn’t you specify on the law that the sender has to be a private person, not a legal entity? If the law is that broad, I am struggling to see it as a loophole.
sarchertech · 10h ago
When the law was crafted it wasn’t feasible for foreign companies to directly sell to individual consumers at scale.
The new business model enabled by the internet and cheap/fast international shipping created a loophole that allowed companies to import billions of dollars of goods without paying any import taxes on them.
IG_Semmelweiss · 10h ago
humans are not perfect.
That's why it is called a loophole
nonethewiser · 10h ago
Its semantic.
Temu and Shein were exploiting the rule.
Gracana · 10h ago
Why was it set at $800 if it’s for grandma’s cookies?
IG_Semmelweiss · 10h ago
It was an example. There's no need to be pedantic.
$800 is a meaningful exception for personal use. If you want a turkish $400 rug or a $300 indian wedding dress, it was always meant to be for personal, not corporate, use.
Can we agree that the law as it was intended was completely abused ?
EDIT: for graphic language
dharmab · 10h ago
$800 was set out of desperation. CBP was overwhelmed and underfunded, so the executive increased the de minimis to significantly higher than any other country ti relive their workload. The proper solution would have been for Congress to increase funding to maintain a reasonable de minimis (many countries use around $50-200), but that wasn't happening.
IG_Semmelweiss · 10h ago
Spot on. But humans aren't perfect.
So now we have to deploy a less than perfect solution. Doesn't make it wrong, its just flawed.
(The likely result looks like CBP problems from before are coming back, correct? Curious on your take - has demand shifted since the rules were set ?)
dharmab · 10h ago
From talking to friends workings in imports and manufacturing, they expect what will happen is weeks or months of delay on most shipments as CBP is utterly unequipped to deal with the volume.
Propelloni · 9h ago
800 US $ is second highest, but not the highest limit around. Uzbekistan has a de minimis limit of 1000 US $ (yes, US $)
detaro · 10h ago
The last time congress changed the de minimus threshold, it gave the following context in the corresponding Act:
FINDINGS.—Congress makes the following findings:
(1) Modernizing international customs is critical for United
States businesses of all sizes, consumers in the United States,
and the economic growth of the United States.
(2) Higher thresholds for the value of articles that may
be entered informally and free of duty provide significant eco-
nomic benefits to businesses and consumers in the United
States and the economy of the United States through costs
savings and reductions in trade transaction costs.
(b) SENSE OF CONGRESS.—It is the sense of Congress that
the United States Trade Representative should encourage other
countries, through bilateral, regional, and multilateral fora, to
establish commercially meaningful de minimis values for express
and postal shipments that are exempt from customs duties and
taxes and from certain entry documentation requirements, as appro-
priate
What exactly does suggest to you that this is intended for personal, non-commerce use?
echoangle · 10h ago
> Can we agree that the law as it was intended was completely raped and abused ?
Not really, is there a source for the rationale of the de minimis exemption?
ipsin · 10h ago
Can we agree that the language of sexual violence is inappropriate in this context?
Ekaros · 10h ago
Would paying extra 24$ on a 400$ rug be unreasonable when importing it?
To me well it is a tax, but in the end not that significant one.
ip26 · 9h ago
We start talking about carve-outs and credits as loopholes when the use begins to violate the spirit. No one has figured out how to capture the electric car tax credit without meeting the spirit, so it’s not a loophole yet.
As an example if you ship a $3196 product in four packages, each valued at $799, you are following the letter of the law but not the spirit.
hshdhdhj4444 · 9h ago
It’s a “loophole” because the system didn’t anticipate that consumers could basically place all their orders directly from suppliers halfway across the world, and that shipping would become inefficient that individual goods could be delivered for pennies.
The exemption existed for stuff like samples, initial batches, one-off items, etc. not so the entire industry could run off these exemptions.
CPLX · 10h ago
It was a loophole. The country taxes imports of X, the intent is for those who sell X in the US to pay the tax.
Standard retailers using distribution have to pay it. But if you put the warehouses outside the US and ship direct you don’t. That’s not how the law was supposed to work.
De minimus is a legal term that means something. It means so small as to not matter. When retailers figured out how to use this approach to send hundreds of billions of dollars of goods without the intended tax, they were exploiting a loophole.
It being closed should have happened ages ago it’s just confusing now because it’s in the midst of a lot of other tariff activity that makes a lot less sense.
A_D_E_P_T · 11h ago
I'm in Europe. My wife buys a lot of stuff directly from China via their internal/domestic marketplaces 1688.com and TaoBao.com. (Better prices, better service, just use a translator app and ship to a freight forwarder.) Currently, those domestic/internal marketplaces are being flooded with cheap stuff. Like $5 jackets of very decent quality. Now's the best-ever time to be a Chinese consumer. (Or one with a freight forwarder and o3 handling translation, as long as you're not in the USA.)
I don't know how hard the manufacturers themselves are complaining, but to some extent you have to imagine that they anticipated this and are looking to recalibrate production and reroute goods.
maxglute · 3h ago
Without US demand, Aliexpress is shipping from PRC to CAN in like 7-10 days, which is faster than Amazon without prime. I haven't had to freight forward from Taobao for a bit, I imagine the same.
9dev · 11h ago
International trade is always a bit delayed due to the volume of stocked goods, and those en route on container ships. The effects will become visible soon though.
folli · 10h ago
Any recommendations regarding freight forwarders?
HarHarVeryFunny · 10h ago
Tariffs are based on country of manufacture, not where they were shipped from, so freight forwarding would only make a difference if this is not truthfully declared.
glimshe · 10h ago
Could someone in Mexico order a Chinese product, take it out of the box, put it in a Mexican made box and export it as a Mexican product?
rvnx · 10h ago
Yes, difficult to prove. Happens all the time with China->Vietnam->US.
xnx · 5h ago
21st century US is discovering smuggling and the black market.
IG_Semmelweiss · 10h ago
I'm interested in this as well
zdragnar · 10h ago
> how hard the manufacturers themselves are complaining
China is facing an economic situation similar to the COVID lockdowns. The export economy is collapsing, and factories are engaged in "suicidal price wars" just to get a little bit of money from their stock.
Exporting to the US is 15% of Chinese exports. Even if that goes to 0% it will not devastate Chinese businesses. It will hurt some there, but if your US business imports a larger percentage of its raw materials or parts from China, you are out of business as there are few alternates. China can sell to any other country to make up some of the loss.
lossolo · 8h ago
> China is facing an economic situation similar to the COVID lockdowns
That sentence sounds like an exaggeration—if not outright propaganda.
I mean, will their 15% of exports to the US impact their economy? Will it cause a slight slowdown? Possibly. But people often forget that around $50–100 billion worth of exports were excluded from the tariffs.
Do you have any sources other than those funded by the U.S. government—especially ones without a history like this?
"On May 10, 2020, RFA published a news article titled "China Border Inspection Strengthens Inspection of Entry and Exit Nationals, International Students Had Their Passports Cut," [83] which contained a screenshot of a Reddit post by a user who said his passport had been clipped by China's border inspections. However, it was later revealed that the user's attached picture was stolen from someone else. The news triggered criticism from mainland Chinese media, saying that the claims stated in the news were incongruent with the situation.[84]
On 11 May 2021, Fact-checker First Draft News found that Chinese- and Cantonese-language versions of Radio Free Asia (RFA) published anti-vaccine misinformation regarding the Chinese vaccines, particularly the ones manufactured by Sinopharm and Sinovac. The investigation found the RFA articles amplified misleading claims about the vaccine programs, and its stories were reprinted by popular tabloid newspapers to reinforce the anti-vaccine misinformation. The RFA site did not cover suspected adverse events related to Western-made vaccines. Wen-Ying Sylvia Chou, program director at the National Cancer Institute, believed these articles caused vaccine hesitancy and global public health risks. Masato Kajimoto, a misinformation expert and journalism professor at the University of Hong Kong, suggested the articles were biased toward anti-Beijing messages and repeated unsubstantiated claims made by unreliable sources, such as The Epoch Times.[85]"
rendaw · 10h ago
Do you mean that because those aren't going to the US, the excess stock is being listed on Chinese marketplaces (and at low prices due to being excess)? Were goods sold in China much more expensive previously?
A_D_E_P_T · 39m ago
Yeah, prices on goods in China have gone down noticeably. I mean, it's always cheap, but now it's pretty ridiculous.
I was chatting with my wife about this, and we came to the conclusion that 1000RMB in China gets you more stuff than 1000EUR in Europe. And, honestly, there's not that much of a quality difference.
sarchertech · 10h ago
I am not in favor of how the administration has handled this at all. But I am in favor of reducing our dependence on Chinese imports.
The externalities for all the cheap stuff we import are too high and the market will never do anything about them.
HarHarVeryFunny · 10h ago
How does it hurt the US for consumers to be able to buy cheap goods from China that would cost a lot more if made here? Cheap clothes are not a national security issue.
The US should be self-reliant on things like electronics, software, industrial equipment, but for many classes of items there is no benefit in pushing up prices for US consumers.
lordloki · 9h ago
I would say that many of those cheap goods are simply trash that people buy impulsively that either collects in their homes or ends up in landfills in a short period of time. Fast fashion being a well known one, where people buy lots of cheap clothes that are of poor quality and may only be worn once before being thrown out. We don't need these things and the environment doesn't need to be full of landfills of this junk either.
HarHarVeryFunny · 8h ago
Maybe, but you're basically describing the entire US consumer culture. I'm originally from the UK, but moved to the US decades ago at age 25. The difference between the two cultures in terms of consumer behavior is huge. Companies like Black and Decker (tools) or Kitchen appliance manufactures make different products for these two markets to account for the different tastes - US consumers prefer semi-disposable quality products that are cheap vs UK preferring higher quality at a price. e.g. using metal vs plastic parts, etc.
Teenage fashion (e.g. Shein) is probably a poor example to focus on though since, even disregarding fast fashion, teenage clothes don't have a long usage period - they get outgrown or fashion changes, etc. The price/quality point of Shein is well suited for this.
sarchertech · 10h ago
Of course the US should focus on goods related to national security over clothing, but small value imports directly impact US electronics manufacturers like Parallax and TI.
I imagine it was easier to do this than to inspect every shipment from china for microcontrollers.
Again I don’t agree with the way they are handling it.
markus_zhang · 10h ago
I think they just use this as another form of taxation.
If a $20 pant doubles to $40, it still beats a domestic one (if there is even one) with one hand.
If the US really wants to reboot manufacturing, first I agree with what you said, it should focus on national security goods as well as higher value add goods. Second, the US should actually lower the tax for machines that build these items and import them to build up these businesses, and third, then it should move upstream i.e. to build those machines domestically and push the taxation higher.
The current policy seems to be the most idiotic.
vorpalhex · 8h ago
Environmental factors for one. Moving cheap crap around long distances is a huge source of pollution. One of the core ways we can actually reduce CO2 emissions to consume less stuff, and bulk Temu crap is the worst of it.
Then comes the human rights factors of forced and unfair labor. Your cheap t-shirts are made off the backs of ethnic minorities not allowed to leave the factory site after their 12+ hour shifts.
Finally comes industry hallowing. Yes, America and Canada and Mexico DO want to produce clothing. No, it will never be $5 or less for a t-shirt. Maybe that's fine. The issue is not that clothes are too expensive - almost everything you see at the thrift store is headed for the trash bin.
HarHarVeryFunny · 7h ago
> Yes, America and Canada and Mexico DO want to produce clothing.
"America" meaning what?
American government - really? Why prefer low paying jobs vs high paying ones?
American CEOs - want to increase share price and their annual bonus. Would prefer to offshore.
American consumers - may like "Made in USA", but given a choice prefer cheap "Made in China" vs expensive
American workers - would prefer high paying jobs, or just stay at home collecting government handouts.
We're basically at "full employment", with even fast food companies finding it hard to hire people. I'm sure unemployed US software developers would prefer if US companies would hire them vs offshoring, but where is the demand for low paying jobs?
HarHarVeryFunny · 7h ago
> Moving cheap crap around long distances is a huge source of pollution. One of the core ways we can actually reduce CO2 emissions to consume less stuff
Perhaps, but we could also help save the planet by all becoming vegetarian, or by staying home rather than flying, etc. In any case, I don't think Trump is looking to reduce consumption or international trade - he (appears) to just want to reduce trade imbalance and/or increase US independence.
> Then comes the human rights factors of forced and unfair labor. Your cheap t-shirts are made off the backs of ethnic minorities not allowed to leave the factory site after their 12+ hour shifts.
Do you think these workers would be happier without a job, or that US adding import taxes to Chinese-made clothes is going to cause Chinese manufacturers to pay more, or reduce working hours? What scenario are you thinking of where US import taxes on Chinese goods would be beneficial to Chinese workers?!
dboreham · 9h ago
Because "they're ripping us off", apparently.
People find it hard to conceive of another human being so mentally degraded that they just don't understand what's going on. But that's what's happening here. Watch the interview segment where the photograph of a guy's knuckle tattoos with inserted text labels in helvetica font is discussed for an example of how stupid this person is.
alabastervlog · 8h ago
That interview managed to be jaw-dropping even after all this time with Trump in the public eye. The interviewer kept trying to move on, and Trump kept coming back to it to insist that the obviously-photoshopped letters and numbers in that photo were actual tattoos. Not that the real tattoos might somehow decode to that, but that the literal letters and numbers "MS13" were on the guy's knuckles, from a photoshop where those weren't even trying to look like tattoos, but were obviously just added by some online rando "decoding" the real ones. He truly seemed to believe it, and it's... just, WT actual F? The image clearly isn't even trying to fool anyone! It's not even credibly a fake! Someone just obviously superimposed those on it, without trying to conceal what they had done!
xnx · 5h ago
It's easy to forget that Trump is a gullible senior citizen like any you might find in any retirement community in Florida until you see an interview like that.
morkalork · 9h ago
There's the argument that if clothes were more expensive, manufacturers would be forced to compete on quality instead of volume, fast fashion would die to ye olde good days where people had fewer but better quality clothing and the environment would be be better off.
Culturally, I don't think we're going back to that. And if you talk to any boomer or older person who remembers what that was like when they were kids they'd hated it.
drumhead · 10h ago
It's going to put a lot of goods out of the reach of poorer people. If there's an alternative source at the same prices I haven't seen it.
No comments yet
derbOac · 10h ago
I'm generally in favor of more diversification, but I really don't think tariffs are the way to go about it. Especially not general tariffs with no conditions for their reduction or removal.
There are other ways to diversify sourcing and encourage internal production.
There's nothing rational about these tariffs in stated aims or implementation.
phyzix5761 · 8h ago
Give people the freedom to choose. Why make the choice for them?
mindslight · 5h ago
If your desired goal is to reduce our dependence on Chinese imports you should actually be completely against what this administration is doing. The doubled cost of importing equipment to build new factories, the unpredictability of policies changing by the month discouraging investment, the locking up of our economy (consumer and industrial) from everything we currently rely on doubling in price. All of these are things that will destroy domestic industry, and at this point it should be painfully clear that there is no plan for actually constructively growing our economy. Yet meanwhile killing the constructive attempts by the Biden administration (eg CHIPS), because you can't have the other team be successful at helping the country!
Then let's look at some of the second order effects. A container of cargo going to a US (eg Amazon) warehouse has to pay tariffs up front, whereas a direct-from-China purchase can pay the tariffs at the border with cash-in-hand. So that gives a leg up to Chinese vendors and marketplaces.
Think about Chinese companies building out factories in other countries. The tariff tax enthusiast response is to imagine we'll respond by raising tariffs on those countries as well like some game of wack-a-mole. But the reality is that trend will be spreading Chinese investment and influence even further throughout the world, and any post-facto attempt at punishment will just push that country fully into the Chinese sphere of influence!
When examined, every single action by this administration seems to be much closer to supporting the desires of our adversaries rather than helping our own situation. It's hard to know exactly whether these people are directly working for foreign interests, just following the winds of social media campaigns working hard to promote edgy feel-smart but society-killing memes, or somewhere in the middle with a wink-wink. But regardless, we need to pull up hard from this societal embrace of team-sport ignorance if we want to have any future that isn't being a hollowed out backwater.
rwmj · 11h ago
Alternate headline is "US introduces higher taxes and more bureaucracy".
Ylpertnodi · 10h ago
I guess one way to keep the 'special relationship' going, is to create your very own Brexit.
ogogmad · 10h ago
The UK did not impose 10+% tariffs. They left a voluntary union. And they might rejoin soon, now that the 'Special Relationship' requires going against Canada and Denmark - which is evil.
chihuahua · 6h ago
Maybe if the UK adopts a general rule that they're in the EU in even years and out in odd years, that would make everyone happy. A reasonable compromise.
sspiff · 10h ago
Up to $800 is not "small parcels" in my book. We used to have the similar (but lower value limit) exemptions in (some) EU countries but those have been abolished several years ago, as well as discounted shipping rates for China as it was finally upgraded away from "developing nation" status.
friendzis · 10h ago
Correction:
Import duties are still generally (depends on product category, some are taxed from first Euro) waived on small parcels.
What parent refers to is small parcel exemption to VAT, however every larger retailer adjusted to that and are now declaring VAT on their end.
Personally, I would say this is a net win
alabastervlog · 11h ago
From what I’ve read in other articles that stated it more-clearly than this one, US de minimus is suspended for only China and Hong Kong (for now…), right?
HarHarVeryFunny · 10h ago
US had a de minimis (<$800) tariff exemption for goods originating from all countries, but that has now been removed for China and Hong Kong, so all goods from those countries, regardless of price, will now incur a US import tax (tariff) at whatever rate Trump is currently imposing (125% for China?).
Basically cheap cloths from Shein/Temu, cheap electronics on eBay, etc all just doubled in price.
alabastervlog · 10h ago
OK, good, I've got some in-flight orders for things from the EU and Japan that'll be impractical or impossible to source if the US gets further cut-off, and every time I read one of these articles that doesn't make it crystal clear that this is (so far) only ending for China and Hong Kong, I get a little nervous that I'm about to get a painful bill.
aziaziazi · 10h ago
> After a series of rises to the threshold, it allowed retailers to ship packages worth less than $800 to US customers without having to pay duties or taxes.
> The European Union has also proposed plans to scrap duty-free exemptions for parcels worth less than €150 (£127.50; $169.35).
Does the threshold apply the package entering the border (a container) or the package for the foreseen destination (the cardboard in your mailbox)?
dharmab · 10h ago
It applies to each parcel, not an entire shipping container. Note that a parcel can contain multiple physical boxes for a single order.
donalhunt · 8h ago
EU exemptions are gone afaik. Previously we had exemptions to avoid VAT / customs (much lower de minimus) but they have been removed in recent years. The shipping / customs industry has not evolved to support the volume of low value goods.
madaxe_again · 10h ago
The EU exemption does not exist in practice - if you ship something worth €20 from the U.K., you can expect to pay ~€50 in import vat, tariffs, customs inspection fees, and courier handling fees.
It’s only really worth importing stuff that’s well over the theoretical threshold, as you’re going to be paying the flat rate fees anyway.
detaro · 10h ago
The key point is that the 150€ limit is a tariff-enforcement limit, but VAT limits are set by the countries (and in recent years often much lower), so even if you don't pay tariffs on your parcel it might still go through the system for VAT purposes and incur the various fees around that.And privatized postal systems means that they can choose how large these fees are.
madaxe_again · 2h ago
Right, but I’m telling you it’s normal to pay tariffs on small value items in the EU - China seem to get the carve-out, but anywhere else, you’re paying duties. I’m not confusing VAT and tariffs.
detaro · 48m ago
not in my experience. shrug Plenty stuff ordered from UK, US and Switzerland, only ever had to deal with VAT. (and most of the the time taking care picking sellers that do IOSS so that happens automatically)
drumhead · 10h ago
How inflationary (or not) will this be. Will just switch to domestic products or will they just reduce consumption overall.
alabastervlog · 10h ago
Domestic production can’t keep up with demand for things like clothes and PCBs.
Weddings are about to get interesting. May regress (“regress”, arguably this is totally fine) to the 1980s and earlier where having special complex color-coordinated dresses for all your bridesmaids was something only the upper-middle and higher could afford. Lots of perfect Disney wedding dreams about to get a ton more expensive.
[edit] it could keep up, of course, especially with depressed demand from higher prices, but it’ll take quite a while to ramp that up, and there won’t be a lot of takers for that investment while de minimus remains in place for other markets that could take over that manufacturing cheaper than the US—India, Vietnam, Indonesia, DR, et c.
atrus · 9h ago
I can't imagine how domestic production can keep up. US manufacturing isn't impossibly far behind China, and now you want to basically double the need, and worse, double the need with low value good like clothes and PCBs? Nobody is going to invest in that.
hypeatei · 9h ago
> Will just switch to domestic products
On what timeline? Does the current environment even encourage companies making huge investments into the U.S. (and no, the pinky promises that we hear about aren't investments) since it'll just change in four years?
There is no central industrial policy being proposed or passed via Congress, just a mad king imposing tariffs on a whim.
ty6853 · 9h ago
Congress voted on tarriffs last night. It's no longer riding on a whim, the entire elected representatives voted on them and decided to keep them. Reversal failed 49-49.
So the mad king theory, I think it was initially defendable, but I'm not so sure now. The people have spoken, through their representatives, and through a president that advertised his tarriff plan during elections.
The American people have spoken, they want this pain.
hypeatei · 9h ago
> longer riding on a whim
Yes it is because Trump can take it away or add more at any moment. Congress doing nothing still means they're not crafting coherent industrial policy and not introducing legislation which would be more stable than one man's whims.
No comments yet
cmrdporcupine · 10h ago
Just read an article about how overseas shippers have been flooding warehouses up here in Canada stockpiling cheap goods destinated for the US market, hoping for the tariffs to get dropped soon:
Article notes that if the tariffs don't get dropped shortly, the cost of warehousing will exceed the tariff cost, and the goods will get dumped into the Canadian market. (Win? Maybe?)
Then we have companies that set up their distributor model to be North American wide, screwing Canadian consumers (adding in tariff overhead for them and taking it as profit) because they still route their goods through the US: https://petapixel.com/2025/04/30/leica-raises-prices-in-cana...
Everything is a mess
andrewstuart · 11h ago
There goes your dirt cheap microcontrollers send from aliexpress for $3.
rasz · 11h ago
DIY fixing cars/tractors/lawnmover just became much more expensive. Chinese carburetors were cheaper on Amazon than a first party rebuild/gasket set at your traditional part suppliers.
sarchertech · 10h ago
I mean you can still pay the $3-$5 import tax on them.
alabastervlog · 10h ago
Not direct-order. There’s a minimum fee. Unless you’re ordering bulk, you’ll be paying a lot more than $3-$5 per board in taxes.
The cheapest alternative now will be to go through a middleman who adds some markup but can pay “merely” the 145% tariff rate because they’re buying a ton of them at a time. 400% total markup on the direct-priced $3 board beats $100 (and soon $200) per parcel ordering just a couple at a time. Though, these businesses may not be viable at the higher prices, and supply might just dry up.
(In fact, the cheapest alternative will probably be “Vietnamese” boards that are lying about where they were manufactured…)
rjmorris · 10h ago
Unless you get hit with the flat fee instead.
> Packages sent to the US from mainland China and Hong Kong with a value of up to $800 now face a 120% tax rate or are subject to a flat fee. The fee started at $100 and is due to rise to $200 at the beginning of June.
sarchertech · 10h ago
Yeah that part was unclear. So maybe the $100 flat fee is the minimum.
In that case us importers will pop up to import them in bulk and your uc goes up to $8.
Maybe it makes sense to order something from Parallax or TI in that case.
foobarian · 10h ago
Yes and then wait half a year for CBP to hire a few thousand more people to handle the workload.
ty6853 · 9h ago
Lol assuming CBP doesn't spend that money on migrant hunting squads and torture camps.
glimshe · 11h ago
I wouldn't want to be in the landfill business right now.
IG_Semmelweiss · 10h ago
Doesn't that depend on the geographic location you are in ? ET had to be buried somewhere!
OutOfHere · 10h ago
This is going to be bad for people who get medicines from abroad. Medicines can be unaffordable as it is.
There’s a whole cottage industry over there where they harvest semiconductors from junk/e-waste and turn them in to usable products again. I assume that’s where the actual FPGA chip came from.
Now prototypes will cost at least 2x, if not more.
These tariffs are essentially shooting US technology development in the foot. Chinese engineers will have the greatest access in the world to manufacturing and components, while engineers in the US who don't already have a large company to bankroll them will just find something else to do.
I had some projects in the pipeline that I might not bother with now. It's simply not worth the money. US PCB fabs are probably even worse, they still get a lot made overseas, but now they also hate you because they exist to do large orders for the DoD, not joe schmo democratizing hardware.
The sad fact that we lost all of these because of the entire electronics supply and design chain moving to Taiwan and China, is why we are where we are. These barriers might bring some back, who knows.
Ultimately global open borders, for goods and services, had their own issues. For example open competition between free market economies and centrally planned economies creates rather obvious advantages of scale that are skewed...
And yet almost all the actual design was still happening in the U.S.
It’s almost like the origin of the components didn’t matter. Access did.
And even if the origin might have shifted the fact that access increased made Americans stronger in Tech not weaker.
Right now, we don’t have origins of manufacturing nor access. Even if some parts of the industry does reshore to the U.S., the access will still be limited primarily to those parts of the industry that re-shored and even there access would be lower due to higher costs.
It’s incredible how America had the fastest growing major economy, was the leader in nearly all the industries of the future, has insanely high per capita income that continues to grow, and decided to throw all that away all because it refuses to undo the decisions that allow all that growth in wealth to accumulate with a tiny minority of the country.
Think for a second. Would you rather there be a new aluminum plant in the US? Or would you rather there be another successful airplane manufacturer. In no world does prefering the aluminum plant get you anywhere close to the same GDP of a airplane factory
https://www.financialexpress.com/trending/trump-tariffs-vira...
Was there a real example of centrally planned economies after the fall of the ussr? More like centrally guided: Korea, Japan, China are all equally good examples.
Which is where? A country outpacing everyone else in growth and recovery after COVID?
This assumption that globalism = bad because we don't have people assembling electronics for $10/hour is strange. Does some of that need to be reshored for national security? Definitely, and that's why we have the CHIPS act but Trump is trying to kill it so I'm not really sure what these tariffs are trying to accomplish and I don't think this administration does either.
If I'm designing something that would need 100 units though, that's going to send a design cost from reasonable to out of reach rather quickly.
Another perverse incentive is that to get items sitting in a US warehouse (eg Amazon), the seller has to pay the high tariffs before they can even start selling them, while also hoping that tariffs aren't lowered before they can sell them all (and the expectation is that Trump is going to have to dial back this idiotic "plan" of his some time). Meanwhile the seller of a direct shipped item has a confirmed sale and cash-in-hand by the time the shipment gets to the border. So I expect the selection of US-stocked items is about to drop dramatically, and the poor economic conditions and abjectly poor leadership is going to leave many people not feeling too bad about (or even gleefully embracing) shopping direct.
There's constant clamoring about increasing STEM engagement and then they go and kill off accessibility of tech.
Tech access is important all the way up and down the cost spectrum. The way people — kids as well as adults — get interested in this stuff is by having things to play with and use. You have an idea and want to work on a prototype? Now it's more expensive. Want to build something with your kid to get them interested in hardware? More expensive.
I support free trade, and in an ideal world we’d have no tariffs at all. But enforcement around imports is hard. You still need some mechanism to regulate goods entering the country, and duty taxes are a practical tool for that. When a U.S. retailer imports goods from China, they pay duties. When Temu ships a nearly identical product directly to U.S. consumers under de minimis, no one pays anything. That’s not a level playing field.
I didn’t realize there was so much sympathy for non value providing middle men in the U.S.
I do actually agree with the de-minimus issue and that the system needed to be redone, but not because I think more Americans should be spending their lives being middle men leeching money off the American user, but because the de-minimus exemption was distorting the markets leading to highly inefficient individual packages instead of bulk packages being shipped.
But the problem isn’t the elimination of de-minimus. If that had been eliminated a year ago, a $1000 import from AliExpress would see a $100-$200 additional cost which while not ideal would have been reasonable.
The problem is the raising of tariffs to extremely high levels that mean that the $1000 goods now carry a $1100-$1500 duty on top.
This isn’t about protecting "middlemen" for the sake of it, it's about applying consistent rules across different channels of commerce. If a domestic retailer has to pay duties to bring in inventory from abroad, but a foreign seller can ship the same item directly to a U.S. consumer with no duty via de minimis, that's a structural arbitrage opportunity, and yes, that does distort the market.
Whether the intermediary adds value or not is a fair debate, but the real issue is the system favoring one pathway over another based on a technicality, not merit. If you want to argue for a globalized market with no tariffs or friction, I’m sympathetic to that. But that’s not what we have, and pretending that eliminating de minimis while raising punitive tariffs are the same problem is a conflation.
I’m with you on criticizing high tariffs — retaliatory or otherwise, especially when they become a blunt weapon. But de minimis wasn't a free-market policy, it was an exploit. Fixing it doesn’t mean embracing protectionism, it means closing a loophole that had gotten too large to ignore.
1. I guess I think mechanisms for regulating goods entering the country should be based on specific articulated harms, and targeted through law enforcement or tariffs with a specific harm reduction goal. It's a bit absurd to me that China is being hit with a giant tariff based solely on source of product, and things like tainted Indian generic drugs continue to be an ongoing issue with actual medical harms.
2. I'm not sure why US consumers should be paying a middleman. If you can buy a product direct from the source, why not? The gains from a middleman should be intrinsic to what the middleman can bring, like savings through bulk purchases or shipping. Maybe more directly, I think tariffs should be eliminated completely, not just de minimis (except for those targeting a specific aim, with articulated goals and endpoint conditions).
3. These discussions have gotten so bizarre to me at some level because the US constitution specifically empowers Congress, not the president, with tariff powers. I don't think they should be allowed to shift those powers to another branch. Grievances about tariffs established by an executive were one of the reasons for the establishment of the US as a separate country to begin with, and just because Congress screwed up one time with tariffs doesn't mean they should be able to abdicate their responsibilities. I think having tariff powers reside with a large distributed body increases the burden of establishing a tariff probably. But this is an entirely different issue from the focus of the article.
I don’t support broad tariffs either — I’d love a world of free trade. But duty taxes aren't the same thing. They're not necessarily protectionist; they exist to fund the enforcement of customs and import regulations. If we agree that there are things we should regulate at the border, plants, animals, counterfeit goods, etc. then you need a mechanism to fund that enforcement. Duty taxes are that mechanism.
De minimis creates a loophole where foreign companies can flood the market with small direct-to-consumer shipments, bypassing both duties and most scrutiny. A U.S. importer pays duties and follows import regs. Temu doesn’t. That’s not about "harm reduction", it's about uneven enforcement and subsidized noncompliance.
I'm all for optimizing enforcement of small package imports and making compliance easier for individuals and small businesses. But we can’t pretend that zero enforcement cost is viable at scale, or that eliminating duties across the board is somehow neutral in its effects.
If you're arguing for removing all import duties and funding border enforcement from general taxes, fine but say that. Otherwise, it feels like folks just want all the upside of globalization with none of the costs or responsibilities.
If one group has to follow the rules and bear the costs, while another gets a free pass because of a legal loophole, you're not fostering innovation or accessibility, you're just subsidizing arbitrage. That’s not sustainable, and it warps both pricing and incentives.
I’m all for lowering costs and increasing access to STEM tools. But if the policy that does that relies on systematically undercutting domestic importers and eroding trade enforcement, then we should be honest about the tradeoffs. Let’s push for smarter, broader reforms (like targeted STEM subsidies or tariff carve-outs for educational goods) instead of defending a workaround that happened to benefit us temporarily.
Could you expend on this? In my understanding (armchair-youtube-expert), seminconductor "recycling" is basically burning the device and to scrap the metallic parts then using as usual cyanide+boiling chloride (or mercury) to extract gold. Then throw away everything else.
The less industrial method involves human dissection of such devices (with pre and post burning) to extract Silver/Cooper
It can be a source of fake chips, but also a source of chips that aren't made anymore.
We focus on businesses like Temu because everyone agrees they sell cheap garbage, but a lot of overseas businesses sell high-quality or even essential goods. (And clearly, for many people, whatever Temu sells is good enough.)
We focus on Temu because they are running a large dollar value business on imports that skirt duty tax. The dollar volume is the important piece here as they playing on an unfair advantage.
In your view, what are the factors in addition to customs labor costs that were weighed in 2016 the choice to increase the de minimis exemption? I'm curious, because you seem to feel very strongly that global economic integration is not one of them.
That’s very different from encouraging large-scale commercial exploitation. When entire logistics chains are built specifically to stay under the threshold, intentionally bypassing duties that domestic importers would have to pay, that’s a policy failure, not a success. You can absolutely argue that it incidentally helped smaller exporters or increased consumer access, but that’s a long way from saying it was intended to support global e-commerce platforms arbitraging regulatory gaps.
You asked what factors were weighed—labor costs and shipment volume handling, sure. Maybe some light consumer benefit. But "building duty-free pipelines for billion-dollar drop-shippers" probably wasn’t in the memo.
Anyone who thought about it critically for like 10 minutes?
It’s the same pattern with discussions of rent control. Despite overwhelming evidence that the third-order consequences make things worse for far more people than the first- and second-order effects help, proponents seem unable to reconcile that “preventing rent from increasing” could possibly make housing less affordable.
The loophole may have been visible, but the ecosystem to take advantage of it at this level simply wasn’t in place yet. So no, this wasn’t as obvious as you’re pretending it was.
In 1930? Sure, you couldn't expect them to know that everyone would have a wireless telegraph in their pocket and they'd have cheaper and more skilled Chinese labor/manufacturing available.
In 2016? Really? Amazon was already going full steam. Ali Express was well known. It absolutely should have been obvious to legislators and those that lobby them professionally what would happen. How many people regularly, or even annually, buy items for over $800 from either of them?
As far back as the 1950s the textile industry was against raising the de minimis threshold because they wouldn't be able to compete with duty free mail order imports. We keep increasing it. We get SHEIN. Surprised Pikachu, nobody could have foreseen this.
It makes no sense for the United States to charge 145% tariffs to normal American companies, and then allow a loophole so that large Chinese e-commerce giants essentially benefit by structuring their business to not operate in the United States. The purpose of the tariff’s is to increase American employment not decrease it.
A loophole to minimize administrative burden makes no sense when applied to companies selling tens of billions of dollars into the US every year.
Temu is not grandma so that's where the loophole comment comes from. It wasn't meant to be used large-scale commercially where you ship 100 small packages instead of 1 large package to avoid the tarrif.
Granted, the US' $800 de minimis, which was created because of a lack of funding to deal with the volume of shipping, was probably a bad decision in retrospect. But removing it entirely is another extreme.
The internet facilitated a direct to consumer model that allows foreign companies to almost completely bypass import taxes.
If you look at the amount of de minimis goods shipped the year after the amount was raised vs today, they have increased over 10x.
Also the pre 2016 limit was $200, still low enough to allow the temu business model.
The new business model enabled by the internet and cheap/fast international shipping created a loophole that allowed companies to import billions of dollars of goods without paying any import taxes on them.
That's why it is called a loophole
Temu and Shein were exploiting the rule.
$800 is a meaningful exception for personal use. If you want a turkish $400 rug or a $300 indian wedding dress, it was always meant to be for personal, not corporate, use.
Can we agree that the law as it was intended was completely abused ?
EDIT: for graphic language
So now we have to deploy a less than perfect solution. Doesn't make it wrong, its just flawed.
(The likely result looks like CBP problems from before are coming back, correct? Curious on your take - has demand shifted since the rules were set ?)
FINDINGS.—Congress makes the following findings: (1) Modernizing international customs is critical for United States businesses of all sizes, consumers in the United States, and the economic growth of the United States. (2) Higher thresholds for the value of articles that may be entered informally and free of duty provide significant eco- nomic benefits to businesses and consumers in the United States and the economy of the United States through costs savings and reductions in trade transaction costs. (b) SENSE OF CONGRESS.—It is the sense of Congress that the United States Trade Representative should encourage other countries, through bilateral, regional, and multilateral fora, to establish commercially meaningful de minimis values for express and postal shipments that are exempt from customs duties and taxes and from certain entry documentation requirements, as appro- priate
What exactly does suggest to you that this is intended for personal, non-commerce use?
Not really, is there a source for the rationale of the de minimis exemption?
To me well it is a tax, but in the end not that significant one.
As an example if you ship a $3196 product in four packages, each valued at $799, you are following the letter of the law but not the spirit.
The exemption existed for stuff like samples, initial batches, one-off items, etc. not so the entire industry could run off these exemptions.
Standard retailers using distribution have to pay it. But if you put the warehouses outside the US and ship direct you don’t. That’s not how the law was supposed to work.
De minimus is a legal term that means something. It means so small as to not matter. When retailers figured out how to use this approach to send hundreds of billions of dollars of goods without the intended tax, they were exploiting a loophole.
It being closed should have happened ages ago it’s just confusing now because it’s in the midst of a lot of other tariff activity that makes a lot less sense.
I don't know how hard the manufacturers themselves are complaining, but to some extent you have to imagine that they anticipated this and are looking to recalibrate production and reroute goods.
China is facing an economic situation similar to the COVID lockdowns. The export economy is collapsing, and factories are engaged in "suicidal price wars" just to get a little bit of money from their stock.
https://www.rfa.org/english/china/2025/04/29/china-us-tariff...
That sentence sounds like an exaggeration—if not outright propaganda. I mean, will their 15% of exports to the US impact their economy? Will it cause a slight slowdown? Possibly. But people often forget that around $50–100 billion worth of exports were excluded from the tariffs.
Do you have any sources other than those funded by the U.S. government—especially ones without a history like this?
"On May 10, 2020, RFA published a news article titled "China Border Inspection Strengthens Inspection of Entry and Exit Nationals, International Students Had Their Passports Cut," [83] which contained a screenshot of a Reddit post by a user who said his passport had been clipped by China's border inspections. However, it was later revealed that the user's attached picture was stolen from someone else. The news triggered criticism from mainland Chinese media, saying that the claims stated in the news were incongruent with the situation.[84]
On 11 May 2021, Fact-checker First Draft News found that Chinese- and Cantonese-language versions of Radio Free Asia (RFA) published anti-vaccine misinformation regarding the Chinese vaccines, particularly the ones manufactured by Sinopharm and Sinovac. The investigation found the RFA articles amplified misleading claims about the vaccine programs, and its stories were reprinted by popular tabloid newspapers to reinforce the anti-vaccine misinformation. The RFA site did not cover suspected adverse events related to Western-made vaccines. Wen-Ying Sylvia Chou, program director at the National Cancer Institute, believed these articles caused vaccine hesitancy and global public health risks. Masato Kajimoto, a misinformation expert and journalism professor at the University of Hong Kong, suggested the articles were biased toward anti-Beijing messages and repeated unsubstantiated claims made by unreliable sources, such as The Epoch Times.[85]"
I was chatting with my wife about this, and we came to the conclusion that 1000RMB in China gets you more stuff than 1000EUR in Europe. And, honestly, there's not that much of a quality difference.
The externalities for all the cheap stuff we import are too high and the market will never do anything about them.
The US should be self-reliant on things like electronics, software, industrial equipment, but for many classes of items there is no benefit in pushing up prices for US consumers.
Teenage fashion (e.g. Shein) is probably a poor example to focus on though since, even disregarding fast fashion, teenage clothes don't have a long usage period - they get outgrown or fashion changes, etc. The price/quality point of Shein is well suited for this.
I imagine it was easier to do this than to inspect every shipment from china for microcontrollers.
Again I don’t agree with the way they are handling it.
If a $20 pant doubles to $40, it still beats a domestic one (if there is even one) with one hand.
If the US really wants to reboot manufacturing, first I agree with what you said, it should focus on national security goods as well as higher value add goods. Second, the US should actually lower the tax for machines that build these items and import them to build up these businesses, and third, then it should move upstream i.e. to build those machines domestically and push the taxation higher.
The current policy seems to be the most idiotic.
Then comes the human rights factors of forced and unfair labor. Your cheap t-shirts are made off the backs of ethnic minorities not allowed to leave the factory site after their 12+ hour shifts.
Finally comes industry hallowing. Yes, America and Canada and Mexico DO want to produce clothing. No, it will never be $5 or less for a t-shirt. Maybe that's fine. The issue is not that clothes are too expensive - almost everything you see at the thrift store is headed for the trash bin.
"America" meaning what?
American government - really? Why prefer low paying jobs vs high paying ones?
American CEOs - want to increase share price and their annual bonus. Would prefer to offshore.
American consumers - may like "Made in USA", but given a choice prefer cheap "Made in China" vs expensive
American workers - would prefer high paying jobs, or just stay at home collecting government handouts.
We're basically at "full employment", with even fast food companies finding it hard to hire people. I'm sure unemployed US software developers would prefer if US companies would hire them vs offshoring, but where is the demand for low paying jobs?
Perhaps, but we could also help save the planet by all becoming vegetarian, or by staying home rather than flying, etc. In any case, I don't think Trump is looking to reduce consumption or international trade - he (appears) to just want to reduce trade imbalance and/or increase US independence.
> Then comes the human rights factors of forced and unfair labor. Your cheap t-shirts are made off the backs of ethnic minorities not allowed to leave the factory site after their 12+ hour shifts.
Do you think these workers would be happier without a job, or that US adding import taxes to Chinese-made clothes is going to cause Chinese manufacturers to pay more, or reduce working hours? What scenario are you thinking of where US import taxes on Chinese goods would be beneficial to Chinese workers?!
People find it hard to conceive of another human being so mentally degraded that they just don't understand what's going on. But that's what's happening here. Watch the interview segment where the photograph of a guy's knuckle tattoos with inserted text labels in helvetica font is discussed for an example of how stupid this person is.
Culturally, I don't think we're going back to that. And if you talk to any boomer or older person who remembers what that was like when they were kids they'd hated it.
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There are other ways to diversify sourcing and encourage internal production.
There's nothing rational about these tariffs in stated aims or implementation.
Then let's look at some of the second order effects. A container of cargo going to a US (eg Amazon) warehouse has to pay tariffs up front, whereas a direct-from-China purchase can pay the tariffs at the border with cash-in-hand. So that gives a leg up to Chinese vendors and marketplaces.
Think about Chinese companies building out factories in other countries. The tariff tax enthusiast response is to imagine we'll respond by raising tariffs on those countries as well like some game of wack-a-mole. But the reality is that trend will be spreading Chinese investment and influence even further throughout the world, and any post-facto attempt at punishment will just push that country fully into the Chinese sphere of influence!
When examined, every single action by this administration seems to be much closer to supporting the desires of our adversaries rather than helping our own situation. It's hard to know exactly whether these people are directly working for foreign interests, just following the winds of social media campaigns working hard to promote edgy feel-smart but society-killing memes, or somewhere in the middle with a wink-wink. But regardless, we need to pull up hard from this societal embrace of team-sport ignorance if we want to have any future that isn't being a hollowed out backwater.
What parent refers to is small parcel exemption to VAT, however every larger retailer adjusted to that and are now declaring VAT on their end.
Personally, I would say this is a net win
Basically cheap cloths from Shein/Temu, cheap electronics on eBay, etc all just doubled in price.
> The European Union has also proposed plans to scrap duty-free exemptions for parcels worth less than €150 (£127.50; $169.35).
Does the threshold apply the package entering the border (a container) or the package for the foreseen destination (the cardboard in your mailbox)?
It’s only really worth importing stuff that’s well over the theoretical threshold, as you’re going to be paying the flat rate fees anyway.
Weddings are about to get interesting. May regress (“regress”, arguably this is totally fine) to the 1980s and earlier where having special complex color-coordinated dresses for all your bridesmaids was something only the upper-middle and higher could afford. Lots of perfect Disney wedding dreams about to get a ton more expensive.
[edit] it could keep up, of course, especially with depressed demand from higher prices, but it’ll take quite a while to ramp that up, and there won’t be a lot of takers for that investment while de minimus remains in place for other markets that could take over that manufacturing cheaper than the US—India, Vietnam, Indonesia, DR, et c.
On what timeline? Does the current environment even encourage companies making huge investments into the U.S. (and no, the pinky promises that we hear about aren't investments) since it'll just change in four years?
There is no central industrial policy being proposed or passed via Congress, just a mad king imposing tariffs on a whim.
So the mad king theory, I think it was initially defendable, but I'm not so sure now. The people have spoken, through their representatives, and through a president that advertised his tarriff plan during elections.
The American people have spoken, they want this pain.
Yes it is because Trump can take it away or add more at any moment. Congress doing nothing still means they're not crafting coherent industrial policy and not introducing legislation which would be more stable than one man's whims.
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https://archive.is/PjEgL
Article notes that if the tariffs don't get dropped shortly, the cost of warehousing will exceed the tariff cost, and the goods will get dumped into the Canadian market. (Win? Maybe?)
Then we have companies that set up their distributor model to be North American wide, screwing Canadian consumers (adding in tariff overhead for them and taking it as profit) because they still route their goods through the US: https://petapixel.com/2025/04/30/leica-raises-prices-in-cana...
Everything is a mess
The cheapest alternative now will be to go through a middleman who adds some markup but can pay “merely” the 145% tariff rate because they’re buying a ton of them at a time. 400% total markup on the direct-priced $3 board beats $100 (and soon $200) per parcel ordering just a couple at a time. Though, these businesses may not be viable at the higher prices, and supply might just dry up.
(In fact, the cheapest alternative will probably be “Vietnamese” boards that are lying about where they were manufactured…)
> Packages sent to the US from mainland China and Hong Kong with a value of up to $800 now face a 120% tax rate or are subject to a flat fee. The fee started at $100 and is due to rise to $200 at the beginning of June.
In that case us importers will pop up to import them in bulk and your uc goes up to $8.
Maybe it makes sense to order something from Parallax or TI in that case.