Restoring Enforcement and Securing the Supply Chain: A Plan to Close America’s Deadliest Trade Loophole

An overview of new executive and legislative actions to end the de minimis loophole, stop illicit fentanyl, and hold foreign adversaries accountable.

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Executive Brief

Key Points

• Ends the De Minimis Loophole: This plan immediately suspends and moves to permanently revoke the $800 duty-free “loophole” (de minimis status). This loophole has allowed imports to explode, rising from 153 million packages in 2015 to over 1 billion in 2023, overwhelming U.S. Customs and Border Protection (CBP).¹
• Stops Illicit Fentanyl and Counterfeits: The de minimis loophole is the primary pipeline for fentanyl, its precursors, and counterfeit goods. In Fiscal Year 2024, de minimis packages accounted for 98% of all narcotics seizures and 97% of counterfeit goods seizures.² These actions reject the false premise that “low value means low risk” ³ and reimpose inspection and duties to stop this flow.
• Restores Tariff Enforcement: Critical U.S. tariffs, such as Section 301 tariffs against China and Section 232 tariffs on steel and aluminum, are rendered useless when foreign companies evade them by splitting large shipments into millions of small, duty-free packages.⁴ This plan restores U.S. trade law by making tariffs apply to all commercial imports, regardless of size.
• Creates Dynamic, “Living” Enforcement: The new law will incorporate by reference all U.S. government restricted-party lists. This means any entity sanctioned by the Office of Foreign Assets Control (OFAC) for drug trafficking ⁵ or added to the Bureau of Industry and Security (BIS) Entity List for national security threats ⁶ will be automatically subject to the law’s penalties. This creates a “living” enforcement tool that adapts to new threats without a new Act of Congress.
• Targets Foreign Adversaries: The plan’s prohibitions are specifically aimed at ‘foreign adversaries’—a term defined as foreign governments or persons who have engaged in a long-term pattern of conduct significantly adverse to U.S. national security.

This report details executive and legislative actions. These actions are designed to close a catastrophic, decades-old loophole in U.S. trade law.

This loophole is known as de minimis. It is being actively exploited by foreign adversaries to wage economic and chemical warfare against the United States.

The current system permits foreign shippers to send billions of packages to American homes. This is particularly true for shippers from the People’s Republic of China (PRC).

These packages arrive without inspection or U.S. duties. This has created a superhighway for illicit fentanyl, counterfeit goods, and contraband. It also underwrites the destruction of American manufacturing and retail.

The actions outlined in this plan will end this failed policy. They will restore the integrity of U.S. tariffs.

They will also give federal agencies the authority to stop this flood of uninspected, dangerous goods. This plan provides the immediate, decisive action required to end this crisis.

Why Now

• An Overwhelming National Security Threat: The daily volume of de minimis packages—now exceeding 4 million per day—is an unmanageable crisis.² CBP officials have stated they “can’t screen all 4 million a day,” ³ leaving the U.S. border de facto open to narcotics and contraband.
• Direct Exploitation by Adversaries: This loophole is not a passive problem; it is an active exploitation. E-commerce platforms founded in the PRC have built their entire business model on this loophole, treating the U.S. Treasury as a subsidy and a delivery service.⁷ This system directly funds our adversaries and hollows out the U.S. economy.
• Economic Erosion: The de minimis loophole erodes the entire U.S. economic base, far beyond just manufacturing and retail. It stifles innovation. It discourages domestic investment. And it threatens supply chain security by creating an over-reliance on foreign adversaries for consumer and industrial goods.
• Broad Public and Industry Support: This plan is championed by U.S. industry leaders, manufacturers, and safety advocates who have long called for an end to this dangerous loophole.⁸

What Changes

Businesses	Consumers	Agencies (CBP/USTR/Commerce)
• All U.S. importers must now pay applicable duties on low-value shipments previously exempt under de minimis [EO §1].	• Online orders from foreign e-commerce sites will now have tariffs and duties included in the final price.	• CBP: Gains authority to stop and inspect all packages. Workload shifts from overwhelming volume processing to comprehensive enforcement [EO §2].
• E-commerce platforms are no longer permitted to facilitate duty-free shipments from foreign adversaries.	• Consumers are protected from uninspected, dangerous goods (fentanyl, unsafe products) that previously flooded the market.2	• CBP: Receives clear directive via Interim Final Rule (IFR) to immediately suspend the $800 threshold, bypassing bureaucratic delays.[9]
• Strict prohibitions apply to any transaction with entities on the BIS Entity List or OFAC SDN List.[5, 6]	• Goods from sanctioned companies (e.g., those involved in forced labor or fentanyl production) will be blocked from the U.S. market.	• BIS/OFAC: Their existing sanctions lists (SDN, Entity List) become dynamically integrated into statutory trade law, giving them new enforcement power.[10]
• Legal challenges are consolidated. Any lawsuit must be filed in the U.S. Court of International Trade (CIT).	• (No direct impact, other than assurance that enforcement actions will not be tied up in frivolous lawsuits).	• DOJ: Defends all legal challenges in a single, expert venue (the CIT) [11], preventing conflicting rulings from district courts.
• No risk of frivolous lawsuits from competitors; the law creates no private right of action.	• (No direct impact).	• All: Enforcement is streamlined, as only the U.S. Government, not private actors, can bring enforcement actions under this law.[12]
• U.S. small businesses that compete with these foreign shippers will finally operate on a level playing field, free from subsidized, duty-free competition.	• Fosters fair competition, which encourages a wider availability of American-made products and higher quality goods.	(No change)

Key Definitions

Here are lay definitions for the most critical terms used in this plan.

• De Minimis: A U.S. trade law provision (19 U.S.C. § 1321) that allows articles valued at $800 or less to enter the U.S. free of duties, taxes, and standard customs inspection.¹³
• Foreign Adversary: Any foreign government or non-government person determined by the Secretary of Commerce to have engaged in a long-term pattern of conduct significantly adverse to the national security of the United States.
• BIS/OFAC: The Bureau of Industry and Security (BIS) ⁶ and the Office of Foreign Assets Control (OFAC) ⁵ are the U.S. agencies that restrict business with foreign parties who threaten national security or are involved in illicit activities.
• CIT (U.S. Court of International Trade): The specialized federal court with exclusive, nationwide jurisdiction over disputes involving U.S. customs and international trade laws.¹⁴

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Works Cited

1. Congressional Research Service, “Imports and the Section 321 (De Minimis) Exemption,” May 2024, https://www.congress.gov/crs-product/R48380
2. U.S. Customs and Border Protection, “CBP Ready to Enforce End of De Minimis Loophole, Securing Borders and Protecting Consumers,” (undated, accessed Nov 2025), https://www.cbp.gov/newsroom/national-media-release/cbp-ready-enforce-end-de-minimis-loophole-securing-borders-and
3. Congressional Research Service, “Imports and the Section 321 (De Minimis) Exemption: Origins, Evolution, and Use,” September 2024, https://www.congress.gov/crs_external_products/R/PDF/R48380/R48380.3.pdf
4. Bloomberg Tax, “Importers Should Review Compliance to Plan for Trump Tariffs,” February 2025, https://news.bloombergtax.com/tax-insights-and-commentary/importers-should-review-compliance-to-plan-for-trump-tariffs
5. U.S. Department of the Treasury, Office of Foreign Assets Control, “Mission,” (undated, accessed Nov 2025), https://ofac.treasury.gov/
6. U.S. Department of Commerce, Bureau of Industry and Security, “Bureau of Industry and Security Mission,” (undated, accessed Nov 2025), https://www.bis.doc.gov/index.php/about-bis/mission-statement
7. Congressional Research Service, “U.S. De Minimis Imports, Particularly from China,” January 2025, https://www.congress.gov/crs-product/IF12891
8. U.S. Department of Trade, “What They Are Saying: Americans Praise President Trump’s Decisive Leadership in Suspending De Minimis,” August 2025, https://www.trade.gov/press-release/what-they-are-saying-americans-praise-president-trumps-decisive-leadership-suspending
9. Federal Register, “A Guide to the Rulemaking Process,” September 2013, https://uploads.federalregister.gov/uploads/2013/09/The-Rulemaking-Process.pdf
10. Hogan Lovells, “US Commerce Department significantly expands the Entity List under new ‘Affiliates Rule’,” September 2025, https://www.hoganlovells.com/en/publications/us-commerce-department-significantly-expands-the-entity-list-under-new-affiliates-rule
11. U.S. Court of International Trade, “Legislative History of 28 U.S.C. § 1581(i),” (undated), https://www.cit.uscourts.gov/sites/cit/files/DCalhoun%201581i%20Leg%20History%20presentation_DJC.pdf
12. Congressional Research Service, “CRS Legal Sidebar: Private Rights of Action,” (undated, accessed Nov 2025), https://www.congress.gov/crs-product/R46484
13. U.S. Customs and Border Protection, “Section 321 Programs,” (undated, accessed Nov 2025), https://www.cbp.gov/trade/trade-enforcement/tftea/section-321-programs
14. U.S. Court of International Trade, “Mission Statement,” (undated, accessed Nov 2025), https://www.cit.uscourts.gov/