Amazon Stands To Gain As ‘De Minimis’ Loophole Closes For Chinese Rivals, Analyst Says: Retail Bulls Rejoice

Amazon.com Inc. (AMZN) is poised to benefit from the elimination of a tax exemption widely used by Chinese platforms Temu and Shein to import low-value products without duties, according to an analyst.

On Wednesday, President Donald Trump signed an executive order shutting down the de minimis trade loophole, effective May 2.

The use of the de minimis provision has surged as U.S. shoppers turn to Chinese e-commerce giants Temu and Shein for cheap goods. 

The rule allowed packages valued at under $800 to enter the country without duty or customs screening​, making it easier for those companies to bring in low-priced goods.

Customs data showed 1.4 billion such shipments in 2024, up from over 1 billion in 2023.

Now, the goods that qualify under the exemption will be subject to a duty of either 30% of their value, or $25 per item. That rate will increase to $50 per item on Jun. 1.

With the exemption eliminated, the competitive threat from Temu and Shein may subside, the Wall Street Journal reported, citing commentary from Morgan Stanley.

In February, Amazon projected lower-than-expected sales and operating income for its first quarter, blaming the unpredictability of the economy for the hard projections.

Separately, the tech giant has reportedly submitted a last-minute bid to acquire TikTok's U.S. operations as part of the divestiture which has a deadline of Apr. 5.

The bid and its outcome will likely have a bearing on the stock.

On Stocktwits, retail sentiment around Amazon notched up a couple of points in the 'bullish' territory, while the message volume rose 37% from the previous day.

"There’s bargains throughout the market today especially here at Amazon," one user posted.

Several other users, too, highlighted the buying opportunity in Amazon.

Shares of AMZN closed at $178.41, down 19% year to date.

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