The Ecommerce Innovation Alliance (EIA) is issuing an urgent warning to American policymakers. The recent flurry of Executive Orders concerning reciprocal tariffs and low-value imports, particularly those originating from the People’s Republic of China (PRC), represent a triple threat to the viability of countless U.S.-based small and mid-sized e-commerce companies. These businesses, many of whom have strategically leveraged the de minimis exception to build efficient supply chains and offer affordable goods to American consumers, now face a period of unprecedented uncertainty and potentially devastating economic consequences. The cumulative impact of President Trump’s recent Executive Orders regarding trade with China will dismantle established business models, stifle innovation, and lead to significant American job losses.

Deconstructing the Three Executive Orders: A Cascade of Consequences

To fully grasp the gravity of the situation, it is crucial to understand the progression and interplay of these three Executive Orders:

• Executive Order 14257 (April 2, 2025): Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices that Contribute to Large and Persistent Annual United States Goods Trade Deficits. This initial order declared a national emergency arising from persistent U.S. goods trade deficits. President Trump stated his intent to impose additional ad valorem duties deemed necessary to address this threat to national security and the economy. Section 4(b) of this order explicitly warned that should any trading partner retaliate, the President could further modify the Harmonized Tariff Schedule of the United States (HTSUS) to increase duties. Furthermore, Section 4(c) indicated a willingness to decrease or limit duties for trading partners taking significant steps to remedy non-reciprocal trade and align with the U.S. on economic and national security matters. Annex I of this order initially listed China with a reciprocal tariff adjustment of 34%. Importantly, this order also stated that duty-free de minimis treatment under 19 U.S.C. 1321(a)(2)(A)-(B) would remain available for eligible articles.
• Executive Order (April 8, 2025): Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports from the People’s Republic of China. This order directly responded to the PRC’s announcement of a 34 percent tariff on all U.S. goods entering China, effective April 10, 2025. Invoking Section 4(b) of the April 2nd order, President Trump significantly increased the ad valorem duty rate for goods from the PRC from 34% to 84%, effective April 9, 2025. Crucially, this order also targeted the de minimis exception. Citing the need to prevent circumvention of the new tariffs and to ensure the efficacy of the April 2nd order, it increased the ad valorem duty rate on low-value imports from 30 percent to a staggering 90 percent. Moreover, the per postal item duty for these specific goods was set to increase from $25 to $75 on May 2, 2025, and further to $150 on June 1, 2025.
• Executive Order (April 9, 2025): Modifying Reciprocal Tariff Rates to Reflect Trading Partner Retaliation and Alignment. Just one day later, this order further escalated the situation with respect to China and provided temporary relief for other trading partners. Following the PRC’s announcement of an 84 percent tariff on all goods imported from the U.S. in response to the April 8th order, President Trump again modified the duty rate for goods from the PRC to an astonishing 125%. Simultaneously, the de minimis tariff increases related to the opioid supply chain, established in the April 8th order, were also amplified. The ad valorem duty rose from 90 percent to 120 percent, and the per postal item duties were increased to $100 (effective May 2nd) and $200 (effective June 1st).

The Devastating Impact on Small and Mid-Sized Ecommerce Businesses

For the multitude of American small and mid-sized ecommerce companies that have built supply chains in China based on the predictability and cost-effectiveness of the de minimis exception (currently $800 or less), these three Executive Orders represent a catastrophic convergence of trade policy changes. The EIA has long championed the critical role of the de minimis exemption in fostering a strong ecommerce sector, enabling businesses to compete and provide American consumers with affordable, high-quality products. The recent actions directly undermine this foundation in several critical ways:

• Skyrocketing Costs due to Punitive Tariffs: The imposition of tariffs as high as 125% on goods originating from China renders the existing cost structures of many ecommerce businesses unsustainable. These companies, often operating on tight margins, lack the capacity to absorb such monumental duty increases. They will be forced to confront impossible choices: drastically inflate prices, risking customer attrition and loss of market share to larger competitors or domestic alternatives, or cease importing these goods altogether, potentially crippling their product offerings and business models.
• Near Elimination of the De Minimis Advantage for China: The dramatic increases in duties specifically targeting low-value imports from China, particularly those related to the opioid supply chain, effectively dismantle the benefits of the de minimis exception for a significant segment of goods sourced from the PRC. While initially intended to streamline trade for low-value shipments where the cost of collection would outweigh the revenue, the exception is now being weaponized to prevent tariff circumvention. This means that numerous small shipments, once entering the U.S. duty-free, will now be subject to exorbitant duty rates, negating the very purpose of the de minimis provision for these businesses.
• Crippling Administrative Burdens and Fees: The erosion of the de minimis exception for China will subject a massive volume of previously exempt low-value shipments to complex formal or informal entry procedures. Small and mid-sized businesses, typically lacking dedicated customs staff and resources, will be overwhelmed by the increased paperwork, potential need for customs brokers, and overall regulatory complexities. Furthermore, U.S. Customs and Border Protection (CBP) has acknowledged the likelihood of a “fee shock” as carriers begin charging significant fees to process these now dutiable low-value packages. These added fees, ranging from $3.53 to $32.53 per shipment for informal entries, will further inflate costs for businesses and ultimately consumers.
• Disruption of Established and Efficient Supply Chains: Many small and mid-sized ecommerce companies have spent years building efficient supply chains centered on the de minimis provision for imports from China. They have cultivated relationships with suppliers, optimized logistics for low-value shipments, and established pricing strategies accordingly. The abrupt imposition of these tariffs and the curtailment of de minimis will force a costly and disruptive re-evaluation and potential overhaul of these established networks, with no guarantee of equally efficient or affordable alternatives.
• Stifled Innovation and Reduced Competitiveness: The increased costs and complexities associated with importing essential components and finished goods from China will stifle innovation and impede product development for small and mid-sized ecommerce companies. The financial risks and time delays in sourcing and testing new products will become prohibitive. Moreover, these businesses will face an even greater competitive disadvantage against larger retailers with more diversified supply chains and resources to navigate these turbulent trade policy changes.
• Threat of Business Closures and American Job Losses: The EIA firmly believes that the cumulative effect of these Executive Orders presents an untenable economic burden for numerous small and mid-sized ecommerce businesses. The inability to absorb the massive tariff and fee increases or to quickly pivot to new, cost-effective supply chains will inevitably lead to business closures and significant losses of American jobs across various sectors, including warehousing, logistics, and related services. CBP’s own analysis of the economic impact of eliminating the de minimis exception projects net job losses in the U.S. economy as a consequence of such policy shifts.
• Impracticality of Immediate Shift to Domestic Manufacturing: While the desire to bolster American manufacturing is understandable, the reality for most small and mid-sized ecommerce businesses is that an immediate and large-scale shift to domestic production is not economically feasible. The lack of sufficient domestic manufacturing capacity, the difficulty in staffing such facilities, and the cost of raw materials (many of which could also be subject to tariffs) make a rapid transition impractical for the vast majority of these enterprises.

The EIA’s Position: A Call for Targeted Solutions and Reconsideration

The Ecommerce Innovation Alliance understands the need to address trade imbalances and national security concerns. However, we vehemently maintain that the broad and indiscriminate application of these drastic tariff increases and the elimination of de minimis for imports from China will disproportionately harm American small businesses and consumers without effectively achieving the stated policy objectives.

We urge policymakers to immediately reconsider this sweeping and damaging approach and to engage in meaningful consultation with the ecommerce industry to understand the real-world consequences of these policies. The EIA continues to advocate for more targeted and incremental measures that address specific areas of concern, such as illicit goods and unfair trade practices, without dismantling the fundamental benefits that the de minimis exception has historically provided to American entrepreneurship and consumer welfare.

Specifically, the EIA reiterates its proposals for:

• Implementing more targeted enforcement measures: Focusing on enhanced data collection, risk assessment, and enforcement against high-risk shipments and known bad actors, rather than broad restrictions on legitimate trade.
• Revisiting the application of de minimis to goods warehoused in U.S. Foreign Trade Zones (FTZs) for U.S. businesses: Allowing U.S. companies to utilize the de minimis exception upon withdrawal of goods valued at $800 or less from FTZs would enhance oversight within a secure and regulated environment while preserving benefits for domestic businesses.

The Ecommerce Innovation Alliance remains steadfast in its commitment to advocating for policies that foster a thriving ecommerce ecosystem, protect American consumers, and ensure a level playing field for businesses of all sizes. We firmly believe that a more nuanced and targeted trade policy, developed in collaboration with industry stakeholders, will better serve the long-term economic interests of the United States and prevent the unnecessary destruction of American businesses that rely on efficient and cost-effective cross-border trade. The time for decisive action and reconsideration is now, before the triple threat of these Executive Orders inflicts irreparable harm on American small business and the consumers they serve.