04-07-2025

Further Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People's Republic of China as Applied to Low-Value Imports

Executive OrderView the Original .pdf
View the Original .pdf

The 1-Minute Brief

What: Executive Order 14256 eliminates duty-free treatment for low-value imports from the People's Republic of China (PRC) and Hong Kong. Effective May 2, 2025, shipments valued at or under $800, which previously qualified for the "de minimis" exemption, will be subject to new duties to combat the shipment of illicit synthetic opioids.

Money: The order imposes either a 30 percent ad valorem duty on the value of goods sent via international mail or a specific duty of $25 per package (increasing to $50 on June 1, 2025). For non-postal shipments, all applicable duties, including a separate 20 percent tariff from a prior order, must be paid.

Your Impact: If you purchase low-cost items directly from sellers in China or Hong Kong, you can expect prices to increase. The cost of these new tariffs will likely be passed on to you, the consumer, resulting in higher prices for goods that were previously inexpensive.

Status: Signed and issued by the President on April 2, 2025. The provisions are set to take effect on May 2, 2025.

What's Actually in the Bill

Executive Order 14256 directly targets a trade rule known as the "de minimis" exemption, which has allowed goods valued at $800 or less to enter the U.S. without incurring tariffs. The administration states that some shippers in the People's Republic of China (PRC) use this exemption to send illicit substances, particularly synthetic opioids, into the United States by concealing the true contents of the packages. This order removes that duty-free privilege for products from the PRC and Hong Kong to address this issue.

Core Provisions:

  • Ends De Minimis Exemption: Effective 12:01 am eastern daylight time on May 2, 2025, shipments from the PRC and Hong Kong valued at or under $800 will no longer be exempt from duties.
  • New Postal Duties: Carriers transporting international postal packages from the PRC or Hong Kong must collect and remit new duties to U.S. Customs and Border Protection (CBP). They can choose one of two methods:
    • A 30 percent ad valorem duty on the value of the shipment.
    • A specific duty of $25 per package until June 1, 2025, at which point it increases to $50 per package.
  • Non-Postal Shipments: For goods arriving through channels other than international mail (like commercial carriers), importers must file a formal entry in the Automated Commercial Environment (ACE) system and pay all applicable duties, including the 20% tariff established by prior executive orders.
  • Bond Requirement: All carriers transporting international postal items from the PRC or Hong Kong must secure a bond to ensure the payment of these new duties.
  • Implementation: The Department of Homeland Security, through CBP, is directed to take all necessary actions to implement and enforce the order.

Stated Purpose (from the Sponsors):

The order explicitly states its purpose is to counteract deceptive shipping practices by PRC-based shippers who exploit the de minimis exemption to hide and send illicit substances to the United States.

  1. To address the significant role these low-value exports play in the U.S. synthetic opioid crisis.
  2. To ensure that tariffs are collected on these goods now that the Secretary of Commerce has confirmed that adequate systems are in place to do so.
  3. To blunt the sustained influx of synthetic opioids from the PRC while still permitting the orderly flow of legitimate international mail.

Key Facts:

Affected Sectors: E-commerce, Retail, Shipping and Logistics, Manufacturing.
Timeline: The new duties and regulations go into effect on May 2, 2025. The specific duty on postal items increases on June 1, 2025. A report on the order's impact is due from the Secretary of Commerce within 90 days of the order.
Scope: The order specifically targets products of the People's Republic of China and Hong Kong entering the United States. It also tasks the Secretary of Commerce with evaluating whether to extend these rules to Macau to prevent circumvention.

The Backstory: How We Got Here

Timeline of Events:

The Rise of De Minimis and E-Commerce (2016-2024):

In 2016, Congress raised the de minimis threshold from $200 to $800, dramatically increasing the volume of duty-free imports. This change coincided with the explosive growth of direct-to-consumer e-commerce platforms, many based in China. The number of de minimis entries surged from 153 million in 2015 to over 1 billion in 2023. This flood of small, low-value packages created significant challenges for U.S. Customs and Border Protection in screening for illicit goods, including narcotics and counterfeit products.

The Opioid Crisis and Executive Action (2025):

In response to what the administration termed a national emergency, a series of executive orders were issued in early 2025.

  • Executive Order 14195 (February 1, 2025): Declared a national emergency regarding the synthetic opioid supply chain from the PRC and imposed an initial tariff on Chinese goods.
  • Executive Order 14200 (February 5, 2025): Temporarily paused the elimination of the de minimis exemption to give agencies time to set up collection systems.
  • Executive Order 14228 (March 3, 2025): Increased the tariff rate on Chinese goods to 20 percent ad valorem, citing a failure by the PRC to curb the flow of synthetic opioids.

Why Now? The Political Calculus:

  • Fulfillment of a Promise: This executive order acts on the threats and determinations made in previous orders from earlier in the year. The administration is moving forward now because the Secretary of Commerce has certified that the necessary infrastructure, specifically the Automated Commercial Environment (ACE) system, is ready to process and collect these new duties.
  • Targeting Illicit Trade: The order is framed as a direct measure to combat the national opioid crisis by closing a loophole believed to facilitate the shipment of fentanyl and its precursors from China.
  • Economic Pressure: The move adds to a broader strategy of using tariffs to exert economic pressure on China, a cornerstone of the current administration's trade policy. This action directly impacts a significant volume of Chinese e-commerce trade.

Your Real-World Impact

The Direct Answer: This directly affects Americans who purchase low-value goods online from companies that ship directly from China and Hong Kong.

What Could Change for You:

Potential Benefits:

  • Supporters argue this could reduce the flow of illicit drugs and counterfeit goods into the country by making it harder to ship them undeclared in small packages.
  • Domestic retailers and manufacturers may face less competition from foreign e-commerce sites that previously had a price advantage due to the lack of tariffs.

Possible Disruptions or Costs:

Short-term (First 3-6 months):

  • Higher Prices: Consumers buying from Chinese e-commerce platforms like Shein and Temu will likely see prices increase to cover the new 30% duty or the $25-$50 per-item fee.
  • Shipping Delays: The new requirement for carriers to collect and remit duties, along with increased scrutiny, could lead to processing delays for packages from China and Hong Kong.

Long-term:

  • Permanent Price Hikes: The end of the duty-free exemption for Chinese goods under $800 is a permanent change that will likely result in sustained higher prices for those products.
  • Shift in Supply Chains: Some companies may move their shipping and fulfillment operations to other countries not affected by this order to regain access to the de minimis exemption, although a later executive order suspended the exemption for all countries.

Who's Most Affected:

Primary Groups:

  • U.S. Consumers: Especially those who frequently buy low-cost goods (e.g., clothing, electronics, home goods) from Chinese online marketplaces.
  • Chinese E-commerce Companies: Businesses like Shein and Temu whose business models rely heavily on shipping low-value items directly to U.S. consumers.
  • Logistics and Shipping Companies: Carriers handling mail and packages from China and Hong Kong will face new administrative burdens and bonding requirements.

Secondary Groups:

  • U.S. Domestic Retailers: May benefit from being more price-competitive against foreign online sellers.
  • U.S. Small Businesses: Companies that rely on importing small quantities of supplies or products from China may see their costs rise.

Regional Impact: There is no specific regional impact within the U.S.; the effects will be felt nationwide by consumers and businesses involved in e-commerce with China.

Bottom Line: If you shop on platforms like Shein or Temu, expect your orders to get more expensive and potentially take longer to arrive as new tariffs are applied to these previously duty-free products.

Where the Parties Stand

Republican Position: "Holding China Accountable"

Core Stance: Generally supportive of using tariffs as a tool to counter perceived unfair trade practices by China and to address national security threats like the influx of fentanyl.

Their Arguments:

  • ✓ Tariffs are a necessary tool to pressure China to change its economic behavior and to stop the flow of illicit drugs.
  • ✓ Closing the de minimis loophole for China protects American businesses from unfair competition.
  • ⚠️ Some Republicans may express concern over the potential for increased costs for American consumers and the risk of retaliatory tariffs from China.
  • ✗ Traditional free-trade Republicans may oppose the broad use of tariffs, arguing they disrupt markets and harm the economy.

Legislative Strategy: As this is an executive order, the legislative branch is not directly involved in its passage. However, Republican members of Congress are likely to publicly support the President's action as a strong stance against China.

Democratic Position: "Tariffs Hurt American Consumers"

Core Stance: Generally critical of broad tariffs, arguing they function as a tax on American consumers and businesses without effectively addressing the root problems.

Their Arguments:

  • ✓ Acknowledges the need to address the opioid crisis and unfair trade from China.
  • ⚠️ Concerned that tariffs are an ineffective tool that will lead to higher prices for working families and could escalate into a larger trade war.
  • ✗ Oppose the unilateral imposition of tariffs without a broader, more strategic international coalition. Democrats are often more divided on trade, but a majority tends to oppose higher tariffs on Chinese goods.

Legislative Strategy: Democratic leadership will likely criticize the executive order, highlighting the negative impact on American consumers. They may call for more targeted and strategic actions against illicit trade and advocate for diplomatic solutions over unilateral tariffs.

Constitutional Check

The Verdict: ⚠️ Questionable

Basis of Authority:

The President cites the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act as the primary legal basis for this action. IEEPA grants the President broad authority to regulate economic transactions after declaring a national emergency in response to an unusual and extraordinary threat.

Relevant Portion of the Constitution (Article II, Section 1): "The executive Power shall be vested in a President of the United States of America." (This is often interpreted broadly, alongside statutes like IEEPA).

Constitutional Implications:

[Delegation of Powers]: The core legal question is whether Congress, through IEEPA, has unconstitutionally delegated its authority to regulate foreign commerce (an Article I power) to the President.
[Precedent]: The use of IEEPA to impose tariffs is a relatively recent and legally contested application of the law. While presidents have used it for sanctions, its use for broad tariffs is the subject of ongoing legal debate and challenges.
[Federalism]: This action is within the federal government's purview over international trade and does not directly overstep powers reserved for the states.

Potential Legal Challenges:

This executive order, along with the preceding ones, is highly likely to be challenged in court by affected businesses and trade associations. Lawsuits would likely argue that:

  1. The President has exceeded the authority granted by IEEPA.
  2. The declared "national emergency" does not meet the statutory definition required to invoke these powers.
  3. The action amounts to an unconstitutional usurpation of Congress's power to set tariffs.

Your Action Options

TO SUPPORT THIS BILL

5-Minute Actions:

  • Call The White House: Leave a comment expressing your support. The White House comment line is (202) 456-1111. "I am calling to express my support for Executive Order 14256, which addresses the opioid crisis by closing the de minimis trade loophole for China."

30-Minute Deep Dive:

  • Write a Detailed Email: Contact the Secretary of Commerce and the U.S. Trade Representative to express support for holding China accountable for its role in the opioid epidemic.
  • Join an Organization: Look for advocacy groups focused on fair trade, domestic manufacturing, or combating the opioid crisis.

TO OPPOSE THIS BILL

5-Minute Actions:

  • Call Your Rep/Senators: Capitol Switchboard: (202) 224-3121. "I'm a constituent from [Your City/Town] and I am concerned that Executive Order 14256 will raise prices for American consumers. I urge [Rep./Sen. Name] to speak out against these new tariffs."

30-Minute Deep Dive:

  • Write a Letter to the Editor: Submit a letter to your local newspaper explaining how tariffs on everyday goods will negatively impact you and your community.
  • Join an Organization: Organizations like the National Retail Federation, Americans for Free Trade, and other consumer advocacy groups have actively opposed broad-based tariffs. The Peterson Institute for International Economics also provides research and analysis on the economic impact of tariffs.