Simon Property Group: Elimination of De Minimis Exemption Provides ‘Material Benefit’ to US Retailers

The Trump administration’s elimination of the de minimis exemption will be great for American retailers, Simon Property Group Chairman, CEO and President David Simon said Monday (May 12).

The de minimis exemption, which was a longstanding rule that allowed packages worth less than $800 to enter the U.S. without paying a tariff, was commonly used by Chinese eCommerce retailers to sell goods at lower prices by shipping them directly to consumers in the U.S.

The rule hurt retailers that were not able to avoid paying the tariffs, and it benefited Chinese companies that took advantage of it, Simon said during Simon Property Group’s quarterly earnings call. The elimination of the loophole will level the playing field, he said.

“I want to applaud the administration for dealing with this loophole. Hopefully, it continues,” Simon said. “I think that’s going to be a material benefit to our retailers to defend themselves against Chinese retailers that ship directly to the consumer. So, that was really, really, really important.”

Simon said this while Simon Property Group, which owns shopping, dining, entertainment and mixed-use destinations, said that two of the three operating statistics it reports for its U.S. malls premium outlets saw year-over-year improvements in the first quarter.

Occupancy rose to 95.9% as of March 31, up from 95.5% at the same time last year, according to a Monday earnings release. Base minimum rent per square foot rose to $58.92, 2.4% higher than the $57.53 reported a year earlier.

Reported retailer sales per square foot stood at $733 for the trailing 12 months ended March 31, per the release. That figure was down from the $745 for the same period in 2024, which was reported in a May 6, 2024, earnings release.

Simon attributed the retailer sales decline to Easter being in the first quarter last year but the second quarter this year, historically bad weather in February affecting traffic to outlet malls, and a slowdown in traffic from Canadian and Mexican customers in some locations near the borders due to political rhetoric.

Speaking of new U.S. tariffs, Simon said during the call that the company saw little impact on its leasing even before the recent de-escalation in trade tensions. The only effect Simon Property Group saw was on four deals with one European retailer that was worried about the cost of importing goods from Europe.

Tariffs could affect retailer sales, though, Simon added.

Looking ahead, Simon Property Group reaffirmed the full year 2025 real estate funds from operations (FFO) guidance range it issued in February.

“We expect the results to trend towards the middle of the range given the current macroeconomic and tariff uncertainty potentially impacting retailer sales,” Simon Property Group Executive Vice President and Chief Financial Officer Brian McDade said during the call.