Trump ends tax loophole: What this means for consumers buying overseas

RICHMOND, Va. (WRIC) — The Trump Administration has ended a long standing tax loophole, called the de minimis exemption, meaning shoppers looking to buy overseas could notice higher prices.

Whether it is a gift for a loved one, a new home purchase or even a new outfit, billions of Americans are buying every single day -- including Central Virginians.

Since online shopping grew during the pandemic, economics professor at Virginia Tech Jadrian Wooten said more and more packages from out of the country are making their way to the U.S.

Until recently, items costing less than $800 were imported without additional fees through the de minimis exemption. On May 2, the Trump Administration did away with the tax loophole meaning consumers are expected to pay for additional shipping costs into the country.

“It is this sort of shock that now all of a sudden, we're paying the full price of it, whether that's good or bad, I think it depends on whether you're looking at it from," Wooden said.

Wooten said while big brands like Shein and Temu are largely impacted, those shopping from anywhere out of the country will notice the difference.

"There's pros and cons on both sides, but ultimately we're the ones that are paying for it. But realistically, we probably should have been paying for it before. We just weren't," Wooden said.

The Trump Administration said they eliminated the exemption to crack down on illegal synthetic opioids coming into the country.

"The government can't check a billion packages that are coming in every single year. And so what ends up happening is these packages are coming in unchecked, under this exemption. And so those may or may not include other items. And to be fair, it may not even include items that are under $800," Wooten said.

Now that the change is in effect, consumers should double check the price tag before they check out.

“Some companies are taking, a more proactive approach in a sort of kind of prepaying it for you, but they're charging you for it when you're checking out. so it's a matter of whether you're paying for it at check out or whether you're paying for it when it arrives," Wooten said.