Why A Closed Loophole On Low-Value Taxes Will Impact All Consumers And How You Can Save – Forbes Advisor – FortiGate

A nearly century-old tax loophole that allowed Americans to buy low-value goods duty-free ended Friday. The “de minimis” rule, which began in 1938, allowed goods worth less than $800 to enter the U.S. without tax and minimal customs documentation.
With the loophole gone, virtually every e-commerce retailer will feel the impact, and consumers might see prices rise. However, credit cards may help you scrounge some cash back on everyday purchases.

Hobbyist Panic: What the Death of De Minimis Means

President Trump’s One Big Beautiful Act, signed into law on July 4, originally slated the end of the de minimis rule for July 1, 2027, after suspending the law in May for goods from Hong Kong and China.

On July 30, Trump signed an executive order expediting its end. Effective immediately, Americans will have to pay duties even on goods with low value, which has sent hobbyists and small businesses into panic, according to 404 Media.

Photographers who rely on eBay for their gear, for instance, are already grappling with the logistical and financial nightmare on forums like Reddit.

“[I’m] trying to figure out what the future of this hobby is going to look like for those of us in the [U.S.] (other than insanely expensive). All of my lenses and my camera body came from Japan, [so] they would have been prohibitively expensive, paying an extra $80 per item,” one user wrote.

“I feel like the entry level to this hobby is going to get hit especially hard with lenses and bodies that would otherwise cost $100 or $200 bucks 1756912333 having [a] minimum $80 tariff placed on them.”

Ebay, a longtime hub for collectors of film cameras, vintage fashion, video games and more, won’t be the only retailer impacted. Platforms for small businesses, like Shopify and Etsy, will also be hit, as well as all retailers that import inventory valued under $800.

The impact of the death of de minimis will be wide-reaching and, according to a February report from Yale and UCLA researchers, will disproportionately affect low-income and minority consumers. Amit Khandelwal and Pablo D. Fajgelbaum, lead authors of the study, “The Value of De Minimis Imports,” found that eliminating the rule could cost consumers $10.9 billion overall, or about $34 per person and $136 per family.

The study also found that lower-income households stand to lose more on average. As a share of income, losses can amount to 0.12 percent for low-income households, 0.04 percent for middle-income households and 0.05 percent for high-income households, the researchers explained. “Thus, we [found] that the lowest-income households would bear the brunt of eliminating [de minimis].”

What You Can Do

As Americans figure out how to navigate life without the de minimis exception, prices for goods will inevitably go up. Certain credit cards offer generous cash back that can help you recoup some money that will add up in the long run.

• Chase Freedom Flex® offers 5% cash back on up to $1,500 in combined purchases in categories that rotate quarterly (requires activation), 5% cash back on travel purchased through Chase Travel℠, 3% cash back on dining and drugstores and 1% cash back on all other purchases. This makes it a valuable pick as cardholders can choose from set categories, allowing them to offset some losses for their hobbies.
• Citi Double Cash® Card earns 2% cash back on all purchases—1% when purchases are made and another 1% when they’re paid off, and earn 5% total cash back on hotel, car rentals and attractions booked with Citi Travel. There are no caps on how much cash back you can earn.
• Chase Freedom Unlimited® does exactly what the name implies, offering unlimited cash back, with elevated earnings in categories like travel. The card offers 5% cash back on travel purchased through Chase Travel℠, 3% cash back on eligible dining and drugstores and 1.5% on all other purchases, which means that you stand to earn more on food, everyday drugstore expenses and travel booked through Chase.