For the past decade and more, a loophole in the nation's import laws has been egregiously exploited by bad actors, criminal organizations, and foreign nations, to cause substantial economic and physical harm to the American people.

On Wednesday, President Donald Trump ordered what is known as the de minimis loophole to be closed by the end of next month, Breitbart reported.

That loophole, which exempted typically small shipments of low-value foreign goods from any duties or other taxes -- and often inspections -- has increasingly been grossly abused over the years to not only avoid tariffs due but also to illicitly smuggle into the U.S. dangerous narcotics and contraband.

De minimis loophole suspended

In an executive order signed on Wednesday, President Trump declared that he found it "necessary" to suspend "duty-free de minimis treatment" for all countries, with an effective date of August 29 for that order.

Under 19 U.S.C. § 1321(a)(2)(C), shipments of foreign goods valued at less than $800 retail were exempted from any duties or taxes that might otherwise be imposed against the origin nation, in large part to avoid the "expense and inconvenience" of enforcement that would be "disproportionate to the amount of revenue that would otherwise be collected."

Trump's order noted that some bad actors use international commerce to "evade law enforcement and hide illicit substances in imports," often using a variety of techniques to "conceal the true contents of the shipments, the identity of the distributors, and the country of origin of the imports include the use of re-shippers in the United States, false invoices, fraudulent postage, and deceptive packaging."

"The risks of evasion, deception, and illicit-drug importation are particularly high for low-value articles that have been eligible for duty-free de minimis treatment," he added.

Massive increase in exploitation of de minimis loophole

According to a White House fact sheet, all foreign goods shipped to the U.S. through normal means that previously would have been eligible for duty-free de minimis treatment will now be subject to all applicable duties, tariffs, and other taxes.

Also closed by President Trump's order was a loophole within the loophole for goods shipped through the international postal system, which will now be subject to either an "ad valorum duty" equal to the applicable tariff rate or, for the first six months, a "specific duty" that ranges from $80-200 per item.

Breitbart noted that the threshold for de minimis treatment was initially set at $200, but was increased to $800 under former President Barack Obama, which was subsequently exploited by China and other foreign nations to flood U.S. markets with cheaply made or counterfeit goods, not to mention illicit substances like fentanyl or its precursors.

The White House fact sheet observed that, between 2015 and 2024, the volume of shipments through the de minimis loophole surged from around 134 million shipments to more than 1.36 billion shipments -- now averaging around 4 million shipments per day -- much of which went untaxed and only some of which was thoroughly inspected for contraband.

Those inspections are key, though, as the fact sheet pointed out that roughly 90% of illegal cargo seizures in Fiscal Year 2024 came from de minimis shipments, including approximately 98% of narcotics seizures, 97% of counterfeit goods seizures, and 77% of health and safety or prohibited items seizures.

Loophole outlived its usefulness

To be sure, as the de minimis statute itself made clear, it was once not cost-effective for the U.S. to enforce and collect duties on small shipments of low-value goods from foreign nations, so those goods were deemed to be exempt.

Yet, times have changed, and the loophole has been exploited to the great detriment of the nation and its people, hence President Trump's decisive action to shutter that loophole and end the avoidance of tariffs due and illicit stream of contraband into the country.