 Trade court won? reinstate tariff exemption onlow-value ?e minimis?shipments, for now |
Source |
American Shipper |
Post Date |
07/31/2025 |
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Key Points
? A federal trade court declined, for now, to block PresidentDonald Trump? decision to a longstanding tariff exemption for low-valueU.S. imports.
? Detroit Axle argued that Trump? utive ordersrescinding ?e minimis?tariff exemptions on shipments valued below $800 wereunlawful and threatened its business.
? Afederal appeals court will hear oral arguments this week in a different casechallenging Trump? ?eciprocal?tariff authority.
Afederal trade court on Monday declined, fornow, to block President Donald Trump? decision to alongstanding tariff exemption for low-value packages shipped to theUnited States, known as de minimis imports.
Athree-judge panel on the U.S. Court of International Trade ruled that thescope of the lawsuit, brought by auto parts retailer Detroit Axle, is alreadycovered by another ongoing case challenging many of Trump? tariffs.
Inthat case, known as V.O.S. Selections v. Trump, the panel ruled against theTrump administration in late May, striking down Trump? sweeping?eciprocal?tariffs and other duties he had imposed.
Butthe decision was quickly paused by the U.S. Court of Appeals for the FederalCircuit, keeping Trump? tariffs in place while the legal battle plays out.
Asa result, ?his court has already granted, and the Federal Circuit subsequentlystayed, all relief Axle requests,?the lower-court panel wrote in Monday?ruling.
?ewill not grant redundant, contingent relief through a preliminary injunctionhere,?they wrote.
Thecourt denied Detroit Axle? bid for a preliminary injunction and stayed itscase, ping the outcome of the broader challenge to Trump? tariffs in V.O.S.
Oralarguments in that case before a federal appeals court are set for Thursdaymorning.
DetroitAxle sued the Trump administration in mid-May, challenging Trump? utiveorders rescinding de minimis exemptions, which allow shipments valued below$800 to enter the U.S. duty free.
Theloophole has been a boon for Chinese budget retailers like Shein and Temu.
ButDetroit Axle? lawsuit argued that Trump? sudden scrapping of the tariffexemption, and his other ?rastic and unlawful?trade policies, could wipe outits business in ? matter of months.?
Theretailer said that its contracts with Chinese manufacturers have helped itbroaden its U.S. customer base with lower prices, while growing its business.But between 2018 and 2020, the company said tariffs imposed on Chinese goodsduring Trump? first presidential term threatened its business model.
That?when Detroit Axle sought to take advantage of the de minimis exemption, itsaid.
Ited a distribution facility in Juarez, Mexico, that imports auto parts fromChina and only fulfilled orders for less than $800, which were spared tariffsunder the longstanding de minimis exemption.
Butthat model is now under ?xistential threat?from Trump? new tariff policies ?specially his April 3 utive order that ed the de minimis exemption forChinese imports by May 2.
Thatorder said that Trump was ?argeting deceptive shipping practices byChinese-based shippers?who hide ?llicit substances, including syntheticopioids, in low-value packages.?
Nonetheless,?he impact on Detroit Axle has been swift and catastrophic,?the company saidin its lawsuit.
?nderthe now-applicable Chinese tariffs, which have reached 72.5%, it iscost-prohibitive for Detroit Axle to import parts from its suppliers in Chinato its Detroit factory.?
?tsfrugal buyers will not bear the increased prices, and Detroit Axle cannotabsorb them,?the retailer wrote.
Thecompany said it would exhaust its inventory by the of June, forcing it toshutter its Michigan facilities and layoff hundreds of employees.
Ina Michigan state filing inlate June, the company said it would be closing its Ferndale warehouse andlaying off 102 employees around Aug. 25.
?hedecision to close this facility is due to unforeseen circumstance, specificallythe sudden imposition of government tariffs, which have significantly disruptedour supply chain and sharply increased the costs of goods,?Detroit Axle saidin that filing.
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