Politically Unstable: Trade and Trumponomics; closing the de minimis loophole

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Friday, August 8, 2025

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[SADLER] I want to talk about the column that you had in our paper this week, talking about how President Trump has shut down the “de minimis” loophole. A lot of our readers, a lot of our listeners, don’t know what the de minimis loophole is. Could you explain this to us and why it is so important?

[NAVARRO] Well, “de minimis” is Latin for it’s a trivial matter, but it turns out in this context, it’s anything but trivial. The way this works is that Donald Trump has imposed historical tariffs on countries around the world. And those countries are paying the tariffs, but not on goods that are $800 or less. And that’s what we call the de minimis loophole.

Congress, in its finite wisdom decades ago, introduced this de minimis thing at like five or ten bucks, it was really small. The idea was that you don’t want to bother, you don’t want to spend twenty dollars to collect two dollars in tariffs. But the thing got totally out of control, they raised the de minimis up to eight hundred dollars, which around the world it’s like nothing; nobody’s close that, everybody else is much smaller. And what that loophole has allowed people to do is basically just jam in stuff through that loophole that would otherwise be tariffed. They lie about it, they say something worth $2,000 is $700, or they bundle little packages up and things like that, and it’s just it’s costing literally tens of billions of dollars.

So with this executive order that the president did, he basically, with one little signature, he was gonna raise tens of billions of dollars in tariff revenues, which would otherwise be evaded by the bad guys, and it’s a long time coming. I tried to do it actually in the first term, but we were lobbied by the Amazons, and the FedEx, and the UPSs, and all the ones that are making out like bandits, but not this time. Okay, the jig was up, we got this. It’s good for America.

And by the way, one of the things that it’ll prevent is using that de minimis loophole, which basically says anything can come in without looking at it from customs. So what does that do? That allows things like fentanyl and counterfeits and everything in between to come in. So, good for national security, good for economic security, good for paying down the federal debt.

[SADLER] It’s also good for stopping counterfeits. I know China is one of the major actors abusing this loophole. And that’s how a lot of these products find their way into America. Can you talk about how this takes aim at China? And, the president has been announcing trade deal after trade deal after trade deal. When is the trade deal with China coming?

[NAVARRO] Well, we’re in an equilibrium now, let’s call it, where we have in place tariffs that are a little over 50%. That’s very significant. Part of it, those tariffs are from the 301 investigations from the first term that cracked down on all of China’s unfair trade practices. Part of it, a significant 20% of that, is based on the fentanyl tariffs. We tariff them because they continue unconscionably to kill thousands and thousands and thousands of Americans, a cumulative number of a million. So that’s where we’re at now.

And Jamieson Greer, the U.S. trade representative, Scott Bessent, and the Treasury Secretary have continued to engage with the Chinese, but as the boss says, let’s see what happens.