Trump’s move is hurting discount Chinese marketplaces such as Temu and Shein. (Raul Ariano/Bloomberg)
A court fight over President Donald Trump’s decision to end a U.S. policy that exempted small-value packages from China from tariffs is moving ahead over the administration’s opposition.
A federal judge on June 5 denied the U.S. Justice Department’s request to pause litigation over what’s known as the “de minimis” tariff exception while a broader fight over Trump’s move to raise global tariffs on imported goods is pending. Amid that fight, the president’s tariffs remain in effect.
Packages coming into the U.S. have qualified for the exception if they have a retail value of $800 or less. Trump’s move to end the exemption for China and Hong Kong is hurting discount Chinese marketplaces such as Temu and Shein Group Ltd. that ship low-cost clothing, household goods and other items directly to U.S. consumers. But it could also hurt U.S. small businesses.
In the case at hand, auto parts distributor Detroit Axle argued that it has separate claims against Trump’s revoking the exemption that aren’t on the table in other active cases. The company says it will be forced to fire hundreds of workers and potentially shut down by the end of June if it can’t get a final court ruling soon.
Detroit Axle says it will be forced to fire hundreds of workers and potentially shut down by the end of June if it can’t get a final court ruling soon. (Detroit Axle via X)
The Justice Department argued that Detroit Axle was “hard-pressed” to demand urgency since it didn’t sue right away over the challenged executive orders and that it would make more sense for the court to wait for other lawsuits to be resolved before deciding next steps in the retailer’s case.
Detroit Axle’s lawyers and a Justice Department spokesperson didn’t immediately respond to requests for comment on the ruling.
The case raises some of the same claims broadly contesting Trump’s tariff hikes, but Detroit Axle’s lawyers said they’re pushing for faster court action only on the small-value import exemption. The company contends that the administration exceeded its authority and failed to go through the administrative rule-making process required under U.S. law.
The administration hasn’t filed its response to Detroit Axle’s claims yet but in other cases has defended Trump’s use of executive power to carry out his trade policies.
Late last month a federal appeals court temporarily allowed Trump’s global “reciprocal” tariffs to take effect, pausing a ruling by the U.S. Court of International Trade that struck down Trump’s use of an economic emergency law to impose the levies, currently at 10% for most major trading partners.
The Court of International Trade ordered the briefing to wrap up in early July on Detroit Axle’s request to reinstate the de minimis exception. That would mean the court is poised to rule after the company says it would exhaust its pre-tariff stockpile and face dire financial consequences.
Meanwhile the appeals court is set to rule as early as next week on whether to give the administration a longer-term win and keep the lower court’s judgment blocking the tariffs on hold while the legal fight plays out.
The case is Axle of Dearborn v. Department of Commerce, 25-cv-91, U.S. Court of International Trade.
