U.S. President Donald Trump departs after a cabinet meeting at Camp David in Thurmont, Maryland, U.S., July 31, 2026.
Nathan Howard | Reuters
The Federal Trade Court on Thursday upheld President Donald Trump’s repeal of the “de minimis” exemption that allowed goods under $800 to be imported duty-free into the United States.
Trump, a leading proponent of tariffs and other forms of protectionism, praised the continued closure of loopholes that he claims are costing the United States billions of dollars in uncollected import tax revenue.
Lawyers for the plaintiff, a Michigan-based auto parts distributor, did not immediately respond to CNBC’s request for comment on the ruling.
The company, Detroit Axle, sued the Trump administration in May 2025, more than three months after the president signed an executive order revoking the MiniMiss waiver.
The plaintiffs argued that President Trump lacked the legal authority to eliminate the loophole under the International Emergency Economic Powers Act (IEEPA).
Last year, President Trump tried to use the same law to impose broad “Emancipation Day” tariffs on nearly every country in the world. In February, the Supreme Court struck down these mandates on the grounds that they were not authorized by IEEPA.
But in a ruling Thursday, a three-judge panel of the U.S. Court of International Trade ruled that the law allows President Trump to eliminate the minimis exemption.
“In reaching this conclusion, we find that the president’s power to “nullify (or) nullify the exercise of any privilege” does not violate the principle of separation of powers,” they said in their order, citing the law.
They concluded that unlike the high-profile case challenging President Trump’s global tariffs, repealing the tax-exempt loophole “is not an exercise of purse power” and “is not an exercise of legislative power.” The Supreme Court said President Trump would need Congressional approval to waive international assignments.
This minimal exemption was heavily leveraged by the retail industry, particularly by e-commerce giants like Shein and Temu, which sell large quantities of low-priced clothing and other goods.
To take advantage of this exemption, some companies shipped individual packages directly from Chinese manufacturers to U.S. consumers. Big companies are setting up warehouses in Canada and Mexico and shipping individual packages across the border, allowing them to avoid costly tariffs regardless of where the goods are manufactured.
Economists have warned that ending the exemption could disproportionately impact low-income and minority U.S. consumers who buy cheaper goods online.
But in a post on Truth social Thursday afternoon, President Trump called the U.S. Trades Court’s decision a “huge victory” against “one of the most despicable loopholes in American trade policy.”
De Minimis “has become a huge loophole for tariff fraud” and has been exploited by criminals transporting drugs and other illegal products into the United States, Trump wrote.
“With the mighty stroke of my pen — No Autonomous Driving!!! — we ended this ridiculous giveaway and forced foreign products to play by the rules,” Trump boasted. “The importer filed a lawsuit. Today, the importer lost the case.”
—CNBC’s Gabriel Fonrouge contributed to this report.
