On Thursday, August 13, the Court of International Trade (CIT), in a per curiam decision, upheld the Trump Administration’s suspension of an $800 de minimis exemption from duties and import taxes. The decision is Axle of Dearborn, Inc. v. Department of Commerce, Slip Op. 26-94, Court No. 25-00091 (Ct. Int’l Trade Aug. 13, 2026).
The authority for suspending this exemption? The International Emergency Economic Powers Act (IEEPA), which the Supreme Court held does not authorize the President to impose tariffs. Some context, the opinion, and a bit of textualism, below the fold.
Section 321 of the Tariff Act, 19 U.S.C. § 1321(a)(2)(C), permits goods valued at $800 or less and imported by one person on one day to enter free from duties and import taxes. Crucially, the statue refers to this exemption as a “privilege” when stating an anti-fragmentation rule that applies to single orders shipped in separate lots.
Beginning in 2025, President Trump invoked IEEPA to suspend de minimis treatment first for certain countries and eventually worldwide. The Supreme Court subsequently held in Learning Resources that IEEPA does not authorize the President to impose tariffs. But, on the same day as the Court’s decision, Trump issued a separate Executive Order maintaining the suspension of de minimis treatment.
In July 2025, Congress repealed the de minimis exemption in the One Big Beautiful Bill Act (OBBBA), effective July 1, 2027. Then, in June 2026, Customs and Border Patrol issued regulations that confirmed the exemption’s suspension based on the Executive Orders before July 2027 and the OBBBA’s changes thereafter.
Before the CIT was Detroit Axle, which imports Chinese-manufactured auto parts through a distribution center in Juárez, Mexico. The company structured individual direct-to-consumer shipments to fall within the $800 exemption, which allowed these shipments to arrive duty-free before the Trump Administration’s suspension. Detroit Axle challenged the Trump Administration’s authority to suspend the de minimis exemption by Executive Order.
The CIT upheld the Trump Administration’s suspension. Although IEEPA does not authorize the President to impose tariffs, the court reasoned that withdrawing an exemption imposed no new duties. The suspension merely made low-value imports subject to existing tariffs already imposed by Congress. There’s a whiff of formalism in this rationale, which, for example, could cast broad swaths of tax law as mere exemptions from § 61(a)’s broad definition of income.
The CIT’s conclusion, however, is bolstered by IEEPA’s text—the same text that doomed Trump’s first round of tariffs. IEEPA allows the President to “regulate . . . importation” (but not impose tariffs) and “nullify, void, prevent, or prohibit . . . exercising any right, power, or privilege” with respect to property in which a foreign national has an interest. Since Congress expressly described the de minimis exemption as a “privilege,” the CIT found that, unlike tariffs, express privileges are on the presidential authorization list under the statute (21). This textual link, rather than a formalist distinction between the imposition of a tax and the removal of an exemption, supplies the opinion’s limiting principle.
The legislative history cited by the CIT was generally supportive, but it supplied no direct connection between the uses of “privilege” in the two statutes. The word was used as part of “right, power, or privilege” in a 1941 amendment to the Trading with the Enemy Act, then Congress carried forward the language in 1977’s IEEPA. Congress enacted the de minimis exemption in 1938, then added the “privilege” language in 1953. Congress had multiple opportunities to make any intended clarification explicit. It did not, notwithstanding the breadth of executive discretion that the CIT’s reading allows.
The practical context, of course, is that Detroit Axle’s cross-border direct-to-consumer model leaned heavily on de minimis treatment—and Congress has now repealed the exemption prospectively. The CIT noted Detroit Axle’s claim that losing the exemption seriously threatened “the company’s profitability, reputation, and operating model,” as well as the company’s explicit management of the exemption’s requirements (11, 25). For Detroit Axle’s Juárez operations, the exemption was anything but de minimis. It was existential.
This posture made Detroit Axle a somewhat awkward champion of reliance interests. The de minimis exemption’s roots are in administrative convenience and efficiency, with a later aim to facilitate small-scale trade (5). Detroit Axle pressed the statute’s $800 line to its practical limit, as did many others. But that degree of planning does not answer whether the President, rather than Congress, could move the line on the exemption.
Related TaxProf Blog coverage:
- Section 122 Tariffs Ruled Unlawful (May 13, 2026)
- Section 122 Tariffs Challenged in the Court of International Trade (Mar. 11, 2026)
- Court of International Trade Orders Tariff Refunds, but Implementation Questions Remain (Mar. 7, 2026)
- The Supreme Court Strikes Down Trump’s IEEPA Tariffs (Feb. 21, 2026)
