A federal trade court has upheld President Donald Trump’s decision to eliminate the “de minimis” exemption, which previously allowed goods valued under $800 to enter the United States without import taxes. The ruling came Thursday from the U.S. Court of International Trade, which determined that Trump had the legal authority to rescind the exemption under the International Emergency Economic Powers Act.
Detroit Axle, a Michigan-based auto-parts distributor, had challenged the administration’s action in court, arguing that Trump lacked the necessary legal power to eliminate the loophole. The company filed its lawsuit in May 2025, more than three months after Trump signed the executive order closing the exemption. The three-judge panel rejected this argument, finding that the president’s authority under the relevant statute did not violate separation of powers principles.
Trump celebrated the decision on Truth Social, calling it a “BIG WIN” and describing the exemption as one of the most problematic aspects of American trade policy. He claimed the loophole had been exploited by retailers, particularly e-commerce platforms, and cost the nation billions in uncollected tax revenue. Critics, however, have warned that eliminating the exemption could disproportionately affect lower-income and minority consumers who purchase inexpensive goods online.
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