A New York-based federal trade court dismissed a legal challenge to President Trump's removal of the duty-free threshold for low-cost goods. The August 13 ruling means the administration can keep collecting tariffs on those packages, and it is already bringing in serious money. Customs and Border Protection reported that the suspension had generated over $1 billion in tariff revenue by the close of 2025.
The case was brought by Detroit Axle, an auto parts distributor. The company argued that Trump had no authority to cut Congress out of the decision by removing the exemption. But the court concluded that Trump's action was allowed under the International Emergency Economic Powers Act, a law that gives the president broad authority during national emergencies.
The Supreme Court struck down Trump's earlier global tariffs, but the judges said this situation is different. The panel said that removing the exemption "does not involve the core congressional power of the purse nor the power to rewrite the Harmonized Tariff Schedule of tariff rates for all merchandise imported into the United States." Trump posted "BIG WIN" on Truth Social after the ruling.
Background
The de minimis rule is the term for the $800 threshold. It was the reason most small packages entered the United States duty-free before the suspension. Under the suspension, those packages are now subject to tariffs, and the court's refusal to pause the exemption has kept the revenue flowing while the case moves forward.
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What Happens Next
The legal fight isn't over. Detroit Axle can still appeal to the US Court of Appeals for the Federal Circuit, so this could drag on. The company has a couple of arguments lined up.
It points out that Congress voted last year to permanently eliminate the exemption, but that change is delayed until 2027. If lawmakers really wanted the president to act now, the company argues, why push the effective date so far out? The company's attorney argued that Congress's choice to set the effective date far into the future was meant to allow firms to adapt, which indicates lawmakers did not want the president to have the authority to end the exemption unilaterally right away.
Detroit Axle also says the Supreme Court's earlier reasoning should apply here. The suspension creates extra tariff costs for importers, which raises the same constitutional questions about who gets to set taxes. The Justice Department sees it differently: "Lifting a suspension on existing tariffs is not the same as creating new ones," the government argued.
What It Means for Shoppers
For shoppers, the practical effect is simple. The $800 threshold used to mean most small purchases slipped through duty-free. Now they do not.
The change, delayed until 2027, adds another wrinkle: even if the courts eventually side with Detroit Axle, the relief would only be temporary. The tariff-free era for cheap imports is likely over either way.
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