Business
How Trump Scrapping the De Minimis Rule Could Affect Consumers and Retailers
President Trump’s executive orders on Saturday imposing broad tariffs on the country’s three largest trading partners also scrapped a shipping workaround for low-cost products, a move that is poised to alter how many online purchases are taxed.
The provision, known as the de minimis exception, has been used by many e-commerce companies to send goods to the United States from China without having to pay taxes on them. Mr. Trump’s decision to revoke the loophole set off confusion and chaos within the U.S. Postal Service, which initially said it would no longer accept packages from China and Hong Kong, before reversing its decision some 12 hours later.
Mr. Trump’s order on Saturday required that all goods leaving China must follow the same rules for higher-value shipments. His ban on duty-free handling of shipments worth up to $800 could shift the landscape for online sales from fast-fashion retailers like Shein and Temu, which rely on Chinese vendors. Both companies have been able to expand their market share largely by exporting goods into the United States without being subject to duties.
On Monday, leaders of Canada and Mexico reached deals with Mr. Trump to delay the tariff rollouts by 30 days. The broad 10 percent tariffs on Chinese goods went into effect on Tuesday.
Here’s what to know about the de minimis rule:
What is the de minimis provision?
The de minimis rule, or Section 321 of the Tariff Act of 1930, was originally aimed at allowing American tourists to send goods bought overseas to the United States without facing taxes. But more recently, companies have used the provision to ship products from other countries that have a retail value below a certain threshold without being subjected to taxes — a huge tax advantage.
In 2016, Congress raised the entry threshold to $800, from $200. Since then, the number of duty-free parcels has risen tenfold. Under the rule, packages can be shipped from other countries without paying tariffs, as long as the shipments do not exceed $800 per recipient per day.
Retailers have increased their reliance on the workaround in recent years, especially since Mr. Trump imposed tariffs on Chinese products in his first term. It underpins major business models, as Shein, Temu and many sellers on Amazon have used the de minimis exemption to bypass taxes.
A report released last week by the Congressional Research Service found that Chinese exports that are exempted by the de minimis rule soared to $66 billion in 2023 from $5.3 billion in 2018.
Why is the Trump administration targeting the rule?
The Trump administration has said it is focused on eliminating the de minimis loophole because of its apparent ties to the fentanyl trade. A White House official said in a call with a reporter on Saturday that the provision was causing the United States to lose tariff revenue — and that the large flow of low-cost goods from China has made it challenging for customs officials to identify fentanyl shipments sent through the mail.
Traditional retailers have expressed frustration with the workaround for different reasons. These retailers typically send big bulk shipments to their warehouses that are subjected to duties. Under pressure from the rising popularity of Chinese e-commerce sites like Temu and Shein, retailers like Walmart and Amazon had explored shifting more toward shipping directly to consumers from China. In late 2024, Amazon started Haul, which was intended to help it compete with Temu and other low-cost online retailers.
Express delivery companies like FedEx and UPS, which fly many of the packages across the Pacific Ocean from China, have spoken out in favor of preserving the de minimis exception. Supporters of de minimis have also long said that eliminating the provision would increase the burden on U.S. customs officials. Customs and Border Protection is also the primary agency responsible for carrying out much of Mr. Trump’s enforcement actions at the border.
How will online retailers be affected?
Shein and Temu, which rely on Chinese vendors, have been able to expand their market share largely by sending cheap goods into the United States. The two companies together have about 17 percent of the discount e-commerce market in the United States for fast fashion, toys and other consumer goods, according to the Congressional Research Service. The unraveling of the de minimis loophole threatens their operations.
While a majority of Shein and Temu products are shipped directly from China, both companies have diversified by working with more U.S.-based sellers and opening warehouses in the United States, which could limit some of the impact.
But other retailers might stand to gain.
“Amazon, as a whole, as well as other online retailers that fulfill from U.S. warehouses, will benefit as their competitors will be negatively affected,” said Yannis Bakos, an associate professor at the Stern School of Business at New York University who studies e-commerce.
What about smaller sellers and consumers?
Small and medium-size online retailers that source from China are likely to be affected, too. About a quarter of the biggest sellers on the e-commerce platform Shopify — sellers that are much smaller than Shein and Temu — also use the de minimis loophole to cheaply ship many of their products from China, said Aaron Rubin, the chief executive of ShipHero, a warehouse management software firm.
The loophole is “pretty widely used,” Mr. Rubin said. Beyond direct sales to customers, many small brands have also opted to ship products worth less than $800 at a time to Amazon to avoid paying taxes, Mr. Rubin added.
“In general, any of these sellers that were shipping directly from China are definitely going to be disrupted,” said Santiago Gallino, an associate professor at the Wharton School at the University of Pennsylvania who researches retail supply chains. Some retailers, including smaller companies, might eventually shift toward bulk orders and set up distribution centers in the United States, if the changes last, he added.
The ban on de minimis will also come at a cost for American consumers. A $15 dress from Shein, for example, could jump to $17, said Izzy Rosenzweig, the chief executive of Portless, a third party logistics company. Research has found that eliminating the provision entirely would result in costs of $11 billion to $13 billion for American consumers and disproportionately hurt poorer and minority households.
Jordyn Holman contributed reporting.
Business
FKA twigs sues ex-boyfriend Shia LaBeouf over ‘unlawful’ NDA
Singer-songwriter FKA twigs is suing her ex-boyfriend, actor Shia LaBeouf, claiming that he is trying to “silence” her from speaking out against sexual abuse through the use of an “unlawful” nondisclosure agreement.
The complaint, filed in Los Angeles Superior Court on Wednesday, seeks a court order to prohibit LeBeouf from enforcing sections of an NDA which Tahliah Barnett — the Grammy Award-winning singer’s legal name — says violates California law.
“Shia LaBeouf has tried to control Tahliah Barnett for the better part of a decade,” the filing states.
“This action was taken in response to Mr. LaBeouf’s attempt to bully and intimidate twigs through a frivolous and unlawful secret arbitration he filed against her in December in which he sought to extract money from her,” said the singer’s attorney Mathew Rosengart, national co-chair of media & entertainment litigation at Greenberg Traurig in Century City, in a statement.
Rosengart added that twigs “refuses to be bullied anymore. She is instead standing up for herself and other survivors of sexual abuse who have improperly been silenced. This is the unusual case that is not about money but about justice and upholding and enforcing California law and policy designed to protect survivors by nullifying illegal NDAs.”
LaBeouf’s attorney Shawn Holley of Kinsella Holley Iser Kump Steinsapir denied the claims.
“When Ms. Barnett and Mr. LaBeouf both decided to resolve their differences and move on with their lives, no one forced her or ‘bullied’ her to stay silent,” Holley said in a statement.
“As a woman with agency, she decided to settle the case and accepted money to dismiss her lawsuit.”
The suit arises out of litigation that Barnett brought against LaBeouf in 2020, when she accused the actor of “physical, sexual, and mental abuse” during their relationship,” as well as “knowingly infect[ing]” Barnett with a sexually transmitted disease.” That case was settled last year.
In a response to the suit, the actor told the New York Times that “many of these allegations are not true.”
But he added, “I am not in the position to defend any of my actions. I owe these women the opportunity to air their statements publicly and accept accountability for those things I have done.”
In the statement Thursday, Holley added that the claim of sexual battery “was disputed, as were the other claims made in Ms. Barnett’s lawsuit.”
Shia LaBeouf poses for photographers upon arrival at the premiere of the film “The Phoenician Scheme” at the 78th annual Cannes Film Festival May 18, 2025.
(Lewis Joly / Invision / AP)
According to the new lawsuit, LaBeouf filed a secret arbitration complaint and “improperly sought exorbitant monies” from Barnett last December, claiming she had breached their agreement by violating its nondisclosure provisions after she gave an interview to the Hollywood Reporter in October.
In the interview, Barnett was asked if she felt safe and answered that as a woman of color in the entertainment industry, she “wouldn’t feel safe” and discussed her involvement with organizations that support survivors, saying, “I think it’s less about me at this point and more about looking forward. Just, you know, moving on with my life.”
The agreement Barnett reached with LaBeouf “contained a deficient and unlawful NDA that is unenforceable,” under California’s Stand Together Against Non-Disclosure Act, according to the complaint. The law forbids NDAs from being used to silence victims of sexual misconduct.
“As the California Legislature has made clear, survivors should have the right to tell their stories without fear or coercion, and California law does not and must not allow abusers and bullies to silence them through secret agreements containing unconscionable, unlawful gag orders,” the complaint states.
The lawsuit further alleges that while LaBeouf has sought to prohibit Barnett from talking about her abuse, he has “repeatedly brought up his relationship with Ms. Barnett—on his own and without being directly asked about her—materially breaching the very confidentiality provisions that he had just contended were fully enforceable against Ms. Barnett.”
While the actor agreed to drop the arbitration in February, he has “refused to acknowledge, however, that the NDA provisions are illegal and unenforceable,” the filing states.
The latest round in LaBeouf’s legal battle with Barnett comes just weeks after a New Orleans judge ordered the actor to begin substance abuse treatment and undergo weekly drug testing after he was arrested on suspicion of assaulting two men in the city’s French Quarter. LaBeouf was also required to post $100,000 bond as part of the conditions of his release. He was charged with two counts of simple battery, the Associated Press reported.
Business
Warner shareholders to vote on Paramount takeover
Warner Bros. Discovery shareholders will soon render a verdict on Hollywood’s biggest merger in nearly a decade.
Warner has set an April 23 special meeting of stockholders to vote on the company’s proposed sale, for $31-a-share, to the Larry Ellison family’s Paramount Skydance.
The $111-billion deal is expected to reshape the entertainment industry by combining two historic film studios, dozens of prominent TV networks, including CBS, HBO, HGTV and Comedy Central, streaming services and two news organizations, CNN and CBS News. The tie-up would give Paramount such beloved characters as Batman, Wile E. Coyote, and Harry Potter, television shows including “Hacks,” and “The Pitt,” and a rich vault of movies that includes “Casablanca,” and “One Battle After Another.”
The $31-a-share offer represents a 63% increase over Paramount Chairman David Ellison’s initial $19-a-share proposal for the company in mid-September, and a 147% premium over Warner’s stock’s trading levels prior to news of Ellison’s interest.
“This transaction is the culmination of the Board’s robust process to unlock the full value of our world-class portfolio,” Warner Bros. Discovery Chief Executive David Zaslav said Thursday in a statement. “We are working closely with Paramount to close the transaction and deliver its benefits to all stakeholders.”
Paramount hopes to finalize the takeover by September. It has been working to secure the blessing of government regulators in the U.S. and abroad.
Should those regulatory deliberations stretch beyond September, Paramount will pay shareholders a so-called “ticking fee” — an extra 25 cents a share for every 90-day-period until the deal closes.
The transaction will leave the combined company with nearly $80-billion in debt, a sum that experts say will lead to significant cost cuts.
Paramount Skydance Chairman and CEO David Ellison attends President Trump’s State of the Union address three days before clinching his hard-fought Warner Bros. Discovery deal.
(Mark Schiefelbein / Associated Press)
For weeks it appeared that Netflix would scoop up Warner Bros.
Netflix initially won the bidding war in early December with a $27.75 offer for the studios and streaming services, including HBO Max. But Ellison refused to throw in the towel. He and his team continued to lobby shareholders, politicians and Warner board members, insisting their deal for the entire company, including the cable channels, was superior and they had a more certain path to win regulatory approval.
The Ellison family is close to President Trump. This week, Trump named Larry Ellison to a proposed White House council on technology issues, including artificial intelligence.
Warner’s board, under pressure, reopened the bidding in late February to allow Paramount to make its case. Warner board members ultimately concluded that Paramount’s bid topped the one from Netflix and the streamer bowed out. Paramount paid a $2.8-billion termination fee to Netflix and signed the merger agreement on Feb. 27.
Warner’s board is advising its shareholders to approve the Paramount deal. Failure to cast a vote will be the same as a no-vote, according to the company’s proxy.
Warner’s largest shareholders include the Vanguard Group, BlackRock, Inc. and State Street Corp.
Zaslav has significant stock and options holdings, worth about $517 million at the deal’s close, according to the proxy.
The regulatory filing also disclosed that a mysterious bidder had surfaced at the auction’s 11th hour.
A firm called Nobelis Capital, Pte., reportedly based in Singapore, alerted Warner on Feb. 18 that it was willing to pay $32.50 a share in cash.
The firm said it had placed $7.5 billion into an escrow account. However, Warner’s bankers “could not find the purported deposit at J.P. Morgan,” according to the proxy. And there was no evidence that Nobelis had any assets or any “equity or debt financing” lined up, Warner said, adding that it “took no further action with respect to the Nobelis proposal.”
Business
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