De Minimis Exemption to End
The House and Senate passed the tax bill, which includes a provision to end the de minimis exemption for all e-commerce effective July 1, 2027. The bill now goes to the President for his signature. The de minimis exemption currently allows imports at or under $800 in value to enter the United States duty-free. The President previously eliminated the de minimis exemption for products of China (including Hong Kong) in Executive Order (“EO”) 14256 from April 2, 2025. See our previous posts here and here.
Trade Talks Continue
Trade talks continue with higher reciprocal tariffs due to be imposed on July 9. At this point, it is unclear what agreements would be reached by that deadline or whether that deadline will be extended for some or all countries. President Trump indicated that a trade agreement with Japan was unlikely and that the reciprocal tariff could be higher than the 24 percent originally imposed. Agreements or an extension of the deadline appear more likely for China, Vietnam, and India.
On July 2, President Trump announced via social media that the United States had reached a trade deal with Vietnam. According to the post, imports from Vietnam would be subject to a 20 percent tariff, instead of the 46 percent reciprocal tariff originally proposed. However, goods “transshipped” through Vietnam would face a 40 percent tariff. In exchange, U.S. goods would enter Vietnam duty-free. No further details were provided. Media reported that there was only a draft agreement at this point, but that a final agreement was expected in the coming weeks.
Trade talks with Canada resumed after President Trump temporarily halted the talks due to Canada’s digital services tax. Canada had planned to implement the tax on June 30, 2025 but President Trump announced that he was halting trade negotiations with Canada over the tax. Canada announced on June 29 that it was rescinding the tax in anticipation of a trade deal with the United States, at which point trade talks resumed with the goal of reaching an agreement by July 21.
CBP Shifting to Enforcement Mode
U.S. Customs and Border Protection announced a restructuring of the Commercial Customs Operations Advisory Committee given the agency’s current focus on “national security… protecting domestic industry and rebuilding its industrial and production capabilities; and clos[ing] revenue and enforcement gaps from unfair trade practices that undermine national security and/or disadvantage domestic industry.” COAC subcommittees and working groups will be restricted to align with these priorities.
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