On Thursday (August 13), the United States Court of International Trade handed down a ruling upholding President Donald Trump’s decision to revoke the de minimis exemption. The exemption previously allowed goods valued below $800 to enter the United States duty‑free. This ruling means this import channel will remain closed.

Trump has long advocated tariffs and other protectionist measures, and views keeping this loophole closed as a victory. He previously stated that the exemption cost the United States billions of dollars in uncollected import tax revenue.

Court Affirms Presidential Authority to Revoke the Exemption

The lawsuit was filed by Detroit Axle, a Michigan‑based auto‑parts distributor. The company sued the Trump administration in May 2025, more than three months after Trump signed an executive order in 2025 to repeal the de minimis exemption. The plaintiff argued that Trump lacked authority under the International Emergency Economic Powers Act (IEEPA) to close this loophole.

Trump invoked the same law last year in an attempt to impose sweeping “Liberation Day” tariffs on nearly all countries across the globe, yet the U.S. Supreme Court struck down those tariffs in February of this year on the grounds that the IEEPA did not authorize such levies.

Nevertheless, in Thursday’s ruling, a three‑judge panel of the U.S. Court of International Trade held that the statute did authorize Trump to terminate the de minimis duty‑free exemption. The judges wrote in their opinion that the President’s power under the act to “cancel or annul… the exercise of any… privilege” does not violate the principle of separation of powers.

The court further noted that, unlike the high‑profile legal challenge against Trump’s global tariffs, revoking this duty‑free loophole “does not exercise the power to appropriate funds” nor “exercise legislative authority”. When invalidating his global tariffs, the Supreme Court ruled that Trump required congressional authorization.

Cross‑Border E‑Commerce Models Remain Under Strain

The de minimis exemption has long been heavily utilized by the retail sector, especially major cross‑border e‑commerce platforms such as Shein and Temu, which ship large volumes of low‑cost apparel and other merchandise to U.S. buyers. With this duty‑free channel shut down, the low‑cost direct‑shipping models and cost structures of relevant enterprises are expected to stay under pressure. Markets will watch for further legal challenges regarding import duties and cross‑border e‑commerce regulation.

As of press time, counsel representing plaintiff Detroit Axle had not immediately responded to media requests for comment.