Some of the biggest news this week comes in the form of tariffs and trade loopholes. President Trump’s executive order that aims to close the de minimis tax loophole is worthy of attention, as doing away with the trade provision that previously allowed foreign retail/e-commerce giants to send shipments valued under $800 to U.S. consumers without incurring import duties or being subject to stringent customs scrutiny is expected to significantly impact the likes of Shein, Temu, Amazon, and co.
The less-reported-on angle is this: The closing of the loophole is also slated to have an effect on the importation of counterfeit goods from China into the United States via small-scale shipments to individual consumers. The provision has garnered attention among lawmakers as a result of ultra-fast fashion giants’ steadfast reliance on it and as Trump has recently emphasized, its ties to the import of drugs. However, the de minimis loophole has facilitated the unintercepted sale of counterfeit products directly to consumers, as well.
By eliminating this exemption, all imports from China, regardless of value, are now subject to standard customs procedures, including the payment of applicable duties and taxes. This change enhances the ability of U.S. Customs and Border Protection to inspect and regulate incoming goods, thereby potentially reducing the likelihood of counterfeit items entering the U.S. market. Moreover, the closure of the de minimis loophole imposes additional costs and logistical challenges on entities that previously relied on this exemption to distribute counterfeit goods. The increased scrutiny and financial burden are expected to deter the shipment of such items, potentially contributing to a decrease in counterfeit goods imported from China.
In theory, the termination of the de minimis tax exemption is poised to diminish the flow of counterfeit products from China into the American market. What remains unclear to me – and apparently the U.S. Postal Service, as well – is how this will actually work. Specifically, how will U.S. Customs will be able to practically inspect the sheer number of small-scale packages coming into the U.S., including ones that contain counterfeit goods.
This is no small matter, after all. U.S. Customs has said it processed more than 1.3 billion de minimis shipments in 2024, and in an apparent nod to the practical issues – and uncertainty – at play here, USPS said this week that it will resume accepting inbound mail and packages from China and Hong Kong Posts, just hours after it suspended service from those regions. I’m watching this closely. So, stay tuned.
Companies promoting circular luxury products should do away with buzzwords like “recycled,” “sustainable,” and “eco-friendly,” according to new research from QUT’s School of Advertising, Marketing and Public Relations, as consumers prefer a combination of “sustainable” and “progress-focused” action words when considering sustainability-centric luxury buys.
> The study: In two field studies that looked at almost a million product listings on second-hand luxury clothing site Vestiaire Collective, and Facebook posts by luxury car brands – the QUT researchers compared consumer engagement, such as likes and shares, of product descriptions that mention sustainability or circular economy with descriptions that have no mention of sustainable features. They then compared these with circular luxury product descriptions using progress-focused language, mainly words – such as “reduce,” “change,” or “make” – from each category.
> The results: The researchers found that posts with descriptions that used sustainable product language to promote the circularity of their luxury products resulted in a decrease in consumer engagement compared with other products. When they looked at listings for sustainability-centric products that achieved an above-average amount of “likes,” they found that these posts included progress-focused language that framed the product in a process of moving forward.
> For example, words like “make,” dynamic,” “get,” “fast,” flow,” and “launch” generated greater consumer engagement with circular and sustainable luxury brand claims, than words like “recycled,” “sustainable,” “eco-friendly,” and “green,” among others.
>> The Bottom Line: Using the right language to inform consumers of the sustainability credentials of a product is vital to maintaining that product’s appeal. (This make me think of Kering’s initial approach to sustainability marketing, in which it downplayed the “green” aspects of many of its brands’ products in order to avoid potentially putting off consumers.)
And in other trade news, the European Commission is looking to address risks posed by low-value imports sold by non-EU online retailers and marketplaces. As part of its “Comprehensive EU Toolbox for Safe and Sustainable E-Commerce” initiative, the Commission is proposing measures in customs, trade, consumer protection, and digital regulations.
The state of things: In 2024, 4.6 billion low-value shipments (those with contents worth less than €150) entered the EU – up 50 percent from the year prior. Many of these packages contains goods that do not comply with EU regulations, raising concerns over product safety, counterfeits, and unfair competition. The EU Commission also notes that the surge in shipments negatively impacts the environment.
To some extent, the European Commission’s plan mirrors that of the U.S., namely, in that it wants to adopt the Customs Union Reform Package, which would remove the duty exemption for shipments valued at less than €150. It also calls for enhanced data-sharing and risk assessment. In addition, it proposes new joint actions to address concerns arising from the surge of unsafe, counterfeit and otherwise non-compliant or illicit products entering the market, including (but not limited to) …
> Targeted measures for imported goods, including launching coordinated controls between customs and market surveillance authorities, as well as coordinated actions on product safety, such as the first-ever product safety sweep.
> Protecting consumers on online marketplaces, highlighting e-commerce practices as a clear enforcement priority under the Digital Services Act, as well as tools, such as the Digital Markets Act, and those that apply to all traders: the General Product Safety Regulation, the Consumer Protection Cooperation Regulation, and the Consumer Protection Network.
> Using digital tools, which can help to facilitate the supervision of the e-commerce landscape through the Digital Product Passport and new AI tools for the detection of potentially non-compliant products.
>> The European Commission published a Q&A about its “E-commerce Communication,” which can be found here.