Trump Targets the Electronic 'Bagmen'

However, among this "big fish," a loophole for small retail purchases that were not subject to duties has existed for a long time. This loophole, called de minimis, allowed foreign suppliers to ship goods directly to American consumers without any serious customs inspection, provided the foreign supplier simply declared the item's value in their country to be below $800. In the Russian economic jargon of the 1990s, such unorganized import conducted by private individuals was called the "bagman" business/import. Loaded to the limit of their physical capabilities, bagmen bought consumer goods in the same China and sold them in Russian markets. Luzhniki, VDNKh, Yuzhny Port, Izmailovo in the 90s were known not as historical monuments of the Russian state, but as the country's largest markets for such bagmen.

Digitalization is changing the world. The emergence of online stores transformed trade. Now bagmen sit at computers and order their "bags" by mail, which is also accessible to any ordinary person not involved in the small wholesale business. According to US Customs and Border Protection (CBP) data, in 2024, there were over 1.36 billion such shipments compared to about 139 million in 2015, or nearly four million parcels per day. Estimates suggest that at least 1 million of these daily 4 million parcels contain no identifying information except for the shipping label and declared value. What actually lies inside these packages is known only to the two parties and the Lord God!

In the US, the de minimis provision with a significantly lower dollar threshold was first introduced almost 100 years ago, simply to spare customs officers the hassle of collecting duties on small items purchased abroad. But everything changed.

In 1994, Customs and Border Protection introduced new rules for importing goods under the "de minimis" principle, which allowed any "consignee" to import goods into the US. This contradicted US law requiring importers to be knowledgeable about the goods they import. The change in CBP rules meant that mail carriers and express delivery couriers became the importers of record, even if they knew nothing about the goods being delivered. This created serious problems, and the National Customs Brokers & Forwarders Association of America warned that the new policy would hinder compliance with visa requirements, intellectual property rules, and FDA regulations.

As alarming as this was, the situation drastically worsened in 2016. Congress suddenly raised the minimum threshold to $800. This decision was lobbied by digital giants - Amazon and other express delivery companies. Now they could import an endless stream of small parcels, completely bypassing any customs duties, declaration requirements, and taxes.

Thus, under the de minimis regime, over a billion parcels a year, mostly from China, entered the US duty-free, without inspection, and without any substantial regulation. For years, foreign suppliers exploited this loophole to flood the American market with untaxed, uninspected, and often dangerous goods, including counterfeit products, and often, bags of fentanyl so "beloved" by ordinary American drug addicts. US Customs and Border Protection acknowledges that the de minimis loophole facilitates the transportation of shipments that may contain narcotics. The agency states that bad actors seek to exploit the growing volumes of low-value shipments to transit illicit goods, including fentanyl.

According to US Department of Homeland Security estimates, fentanyl delivered directly to Americans' homes is extremely potent - often with purity exceeding 90%. This far exceeds the average concentration of fentanyl seized at the border - 10%. Monthly, at the US-Mexico border, customs officers seize thousands of pounds of fentanyl. Moreover, the amount of fentanyl seizures at the US-Mexico border increased by 164% just between 2020 and 2022! But the main channel for the drug's entry is in the millions of parcels from electronic bagmen, where this drug is cheap and easily accessible. Thanks to the excellent work of this channel, Amazon and Chinese electronic platforms reap billions in profits, while over 73,000 Americans died in 2024 from an overdose of this synthetic opioid.

The consequences of such efficient electronic trade are taking on a macroeconomic dimension. According to some estimates, the de minimis loophole alone increased the US trade deficit with China by approximately $188 billion in 2022.

On May 2, 2025, the White House administration revoked de minimis for imports from China and Hong Kong, from where a significant portion of such shipments originate. Closing de minimis means that commercial imports declared at a value less than $800 must be entered into the United States through a customs procedure known as "Informal Entry," which was already in place for cargo declared between $800 and $2500. Informal Entry represents a substantial improvement over the lawlessness of de minimis, as importers are required to provide standard import documentation and pay applicable duties and taxes, although accountability issues still exist, such as the lack of a requirement for a registered US importer and the absence of bond requirements.

Peter Navarro, Trump's senior trade advisor, stated that eliminating this "Chinese" loophole "will add up to $10 billion a year to our treasury in duty revenues, create thousands of jobs, and protect against billions lost to counterfeiting, piracy, and theft of intellectual property." Since the revocation of this benefit through the end of August, Customs and Border Protection has collected $492 million USD in duties on shipments from these places that previously would have been duty-free.

And from August 29, 2025, Trump extended the revocation of de minimis to all other countries! This step now guarantees that goods from all over the world can no longer enter the US market duty-free and without inspection if valued below the $800 threshold. It stops the chaos and lawlessness in e-commerce, as currently most sellers in the American Amazon store are unknown foreign retailers. Now duties are imposed on these shipments. They can range from 10% to 30% or more of the goods' value, depending on the country of origin.

Let's do our own rough calculation. Conditionally: 1 billion parcels per year, average declared value $500, average duty rate 20%. Expected budget revenue: 500 billion x 0.2 = $100 billion! Small change for the US's trillion-dollar budget problems, but nice!

Of course, even after the May ban was adopted, neoliberal cliques of "free trade" began squealing about the violation of individual rights and freedoms (those very individuals dying from fentanyl), about the collapse of the US trade system, about the great burden on US Customs and Border Protection, and other horrors!

Yes! Eliminating this loophole has already disrupted supply chains. Many foreign post offices recently suspended shipping goods to the US, trying to cope with the new rules. Foreign companies using postal networks currently cannot deliver goods to the US and fear for their future.

FedEx and UPS reported this year that the removal of the tax exemption led to a drop in shipping volumes between China and the US. According to an analysis of credit and debit card transactions by Consumer Edge, which tracks consumer data, this move in May prompted US buyers to cut their spending on Shein and Temu — Chinese e-commerce companies that sell large volumes of Chinese-made goods.

Temu's sales are still significantly lower than last year. However, Shein's sales have somewhat recovered, increasing by 9% in July compared to last year, according to Consumer Edge data. This is because although Americans shopping on Shein made 12% fewer purchases, they spent 23% more in dollars, indicating that Shein raised prices in response to the tariffs.

US customs officers will have more work; they will have to reclassify these shipments and ensure the application of appropriate tariff rates.

But supporters of this measure expect an improvement in the very organization of trade. Instead of containers full of 10,000 individually packaged mailbox-sized shipments, importers will return to buying in bulk. Bulk import is much safer for effectively ensuring economic and social security.

Let's "philosophize" in conclusion. Trump has pulled another brick out of the dilapidated building of globalism. And he didn't balk at such a "trifle" as personal mail parcels! Although it's not a trifle at all, but a serious lever of trade dominance by foreign manufacturers. But there's no use crying over spilt milk. After the issuance of a fundamental medical report (epicrisis) on the system of "free" trade and a fundamental shift towards protectionism on all fronts, this decision fits perfectly into the overall management logic. The new world economic order (world order) is no longer knocking at the door but has long entered and is clearing away the rubbish in the neglected house of globalism. America, which started building this house, is now in a hurry to get out of it to avoid being caught under the collapsing building's rubble. And an important lesson for our long-suffering homeland: during a global restructuring of the world order, there are no trifles!