The Trump administration can continue to collect tariffs on low-dollar imports after a U.S. trade court rejected a challenge to the president’s policies.
In a decision on August 13, the court refused to disturb the president’s executive orders over the past year that lifted what’s known as the “de minimis” exemption for goods with a retail value of $800 or less. President Donald Trump’s suspension of the carve-out had led to more than $1 billion in duty payments by the end of 2025, according to Customs and Border Protection.
The ruling from the New York-based U.S. Court of International Trade provides a boost to Trump’s trade agenda, which has faced a slew of legal challenges. The U.S. Supreme Court earlier this year struck down the president’s use of an emergency economic powers law to impose global tariffs. He has faced more lawsuits over his subsequent efforts to order sweeping levies, most recently under Section 301 of the Trade Act of 1974.
The court found that Trump’s move to end the tariff exemption for low-cost goods — a type of “privilege,” the court said — was allowed under the International Emergency Economic Powers Act, distinguishing it from his initial attempt at imposing global tariffs, which a majority of Supreme Court justices found he lacked authority to do under the same law.
The elimination of de minimis 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,” the three-judge panel concluded in a jointly-authored opinion.
Trump touted the ruling as a “BIG WIN” in a post on Truth Social.
The legal fight over the duty exception for low-cost goods had been on hold for the past year as the other tariff-related litigation played out. U.S.-based auto parts distributor Detroit Axle, which brought the lawsuit, argued that Trump unlawfully overrode Congress when he halted the exemption. Last summer, the trade court denied the company’s request to restore the carve-out while the litigation went forward.
Detroit Axle Chief Executive Officer Mike Musheinesh said in a statement the case was brought “because we believe the elimination of the de minimis exemption raised important questions for American businesses and consumers.”
“We continue to have great respect for the court and for the judicial process, and will continue to focus on serving our customers, supporting our employees and adapting to the evolving trade environment,” he said.
Congress voted last year to permanently get rid of the exemption, but that won’t take effect until 2027. Detroit Axle’s lawyer argued that lawmakers adopted a longer timeline in order to give businesses time to prepare, and that served as proof that Congress hadn’t intended to give the president the power to immediately halt it on his own.
Detroit Axle argued that the justices’ findings earlier this year that the emergency powers law didn’t give Trump the power to impose those duties should also apply to the de minimis exemption suspension, since it would have the effect of creating additional tariff obligations for importers.
The Justice Department argued that lifting a suspension on tariffs that were already in effect was not the same as ordering new ones. The government pointed to text within the emergency powers act that gave the president power to “nullify, void, prevent, or prohibit” the exercise of a “privilege” related to property, arguing that language provided Trump with a legal foundation to halt the exemption.
The case is Axle of Dearborn v. Department of Commerce, 25-cv-91, U.S. Court of International Trade (New York).
