Three-judge panel rules that emergency law allows President Trump to suspend duty-free treatment exploited by foreign shippers

President Donald Trump scored a major legal victory Thursday when the United States Court of International Trade upheld his authority to close the duty-free “de minimis” loophole for low-value foreign shipments.

Assistant Attorney General for the Civil Division Bret Shumate announced on X:

“The Court of International Trade upheld @POTUS authority to close the de minimis exemption for tariffs.”

Trump immediately celebrated the ruling on Truth Social:

“BIG WIN today at the U.S. Court of International Trade on one of the most DESPICABLE loopholes in American Trade Policy — The so-called ‘de minimis’ exemption. For years, Foreign Shippers could send packages worth up to $800 into our Country, DUTY FREE, NO TARIFF, far less scrutiny. It became a giant loophole for TARIFF Cheats — and a Pipeline exploited by Fentanyl Traffickers, Counterfeiters, and other Criminals shipping dangerous and illegal products into America. … With the stroke of my mighty pen — NO AUTOPEN!!! — we ended this ridiculous giveaway… The Importers sued. Today, THEY LOST. The Court ruled that the President had the Legal Authority to rescind this so-called ‘privilege.’”

The de minimis rule, codified at 19 U.S.C. § 1321, originally allowed the Treasury Secretary to admit tiny shipments duty-free because collecting the tax wasn’t worth the cost.

Congress later jacked the threshold all the way up to $800. What started as administrative convenience became a massive abuse: Chinese e-commerce giants like Temu and Shein, counterfeiters, and drug traffickers poured hundreds of millions of packages into the U.S. with minimal scrutiny.

As The Gateway Pundit previously reported, the exemption allowed foreign businesses, particularly sellers in China and Hong Kong, to send low-value merchandise into the United States without paying the duties faced by conventional importers.

An April 2025 Gateway Pundit article explained how the loophole disadvantaged American businesses and allowed foreign companies to bypass customs scrutiny: “From De Minimis to Penguins: Trump’s Tariffs Are Rational.”

The Gateway Pundit later reported that Chinese retail giant Temu stopped offering many China-shipped products to American customers after Trump closed the loophole: “Temu Online Marketplace Halts Shipments from China to US as Trump Closes Loophole.”

In 2024 alone the loophole allegedly cost America an estimated $10.8 billion in foregone tariff revenue while serving as a preferred channel for fentanyl precursors and other contraband.

President Trump began closing it in early 2025 as part of national emergencies declared over the fentanyl crisis and reciprocal trade imbalances.

He first targeted China, then expanded the suspension worldwide effective August 29, 2025 (Executive Order 14324), and reaffirmed it after the Supreme Court struck down broader IEEPA tariffs in Learning Resources, Inc. v. Trump.

The de minimis rescission itself was never before the Supreme Court. Congress, in the One Big Beautiful Bill Act, later voted to permanently repeal the statutory exemption effective July 1, 2027, while explicitly stating that nothing in that law should be read to limit the President’s existing authorities to restrict the privilege before then.

Detroit Axle sued, claiming the President lacked power under IEEPA and that agency implementation was arbitrary and capricious under the Administrative Procedure Act.

The company had opened a distribution center in Juarez, Mexico, specifically so it could import Chinese auto parts, repackage them into sub-$800 orders, and ship them duty-free into the United States, treating each individual customer shipment as a separate “one person on one day” entry under the exemption.

The Court of International Trade, in a per curiam opinion by Judges Gary S. Katzmann, Timothy M. Reif, and Jane A. Restani (Slip Op. 26-94), rejected those arguments.

The panel held that IEEPA expressly authorizes the President to “nullify [or] void … exercising any right, power, or privilege” with respect to property in which a foreign country or national has an interest.

The de minimis statute itself twice refers to the duty-free treatment as a “privilege.” Congress has even used the term “de minimis privilege” in recent legislative materials.

Critically, the court distinguished this action from the tariffs invalidated by the Supreme Court. Rescinding the exemption imposes no new duties, it simply subjects the low-value goods to the same Congressionally authorized rates that already apply to higher-value shipments of the same merchandise.

It is not an exercise of the power of the purse, nor is it the functional equivalent of the line-item veto struck down in Clinton v. City of New York. The President is executing policy Congress itself embodied in IEEPA by determining the existence of a national emergency and then taking an enumerated action.

The court further held that the agency actions implementing the President’s directive are purely ministerial and therefore not subject to APA review under Franklin v. Massachusetts.

The post Court of International Trade Upholds President’s Authority to Shut Down the $800 De Minimis Tariff Loophole — Giant Pipeline for Chinese Junk, Fentanyl, and Tariff Cheats Crushed appeared first on The Gateway Pundit.