New Tariffs Hit Shein, Temu: What It Means for You

U.S. Kills Loophole, Tariffs Slam Shein, Temu

As of May 2, 2025, the U.S. government has terminated the “de minimis” tax exemption, which previously allowed low-value imports under $800 to enter the country duty-free. This change directly impacts e-commerce giants like Shein and Temu, which relied heavily on this loophole to avoid paying billions in duties. Now, imports from China and Hong Kong valued at $800 or less face a 120% tax or a flat fee, beginning at $100 and rising to $200 in June. This policy shift is part of former President Donald Trump’s broader tariff strategy aimed at curbing imports and boosting domestic production. The closure of the de minimis loophole is expected to burden small businesses and consumers with potential price increases of up to 30%, totaling an estimated $22 billion annually.

Shoppers See Price Hikes, Delays Mount

With the termination of the de minimis exemption, consumers are experiencing higher prices and shipping delays. For instance, an $18.47 dress on Temu now costs $44.68 after import charges. The U.S. Postal Service will charge 120% or a flat fee per package. While the rule change challenges many, U.S.-based manufacturers and brands may benefit as competition from cheaper Chinese imports diminishes. Industry groups like U.S. flag manufacturers and bike dealers support the move, expecting improved sales and fairer competition.

Temu Blocks U.S. Shoppers from Seeing Products Shipped from China

The American version of Temu abruptly began to show only “local” products days before the Trump administration was set to end a tariff loophole for small packages from China. This move is part of Temu’s strategy to adapt to the new tariff environment by focusing on local-to-local fulfillment models. By displaying only products stored in U.S. warehouses, Temu aims to mitigate the impact of the new tariffs on its operations and maintain its customer base in the U.S.

U.S. Retailers Brace for Supply Chain Disruptions

Amid escalating global trade tensions, particularly between the U.S. and China, shoppers should expect to see empty retail shelves and price surges starting around May 10, 2025. Retail expert Molsen Hart attributes this to the shutdown of trade from China initiated on April 10 due to increased U.S. tariffs, which are significantly impacting the supply chain. Shipping delays will affect various U.S. cities sequentially, starting with Los Angeles, then Chicago and Houston. Even if tariffs were lifted immediately, recovery would take weeks due to the lag in resuming production and shipments. Major retailers such as Walmart and Target are preparing for increased costs, and online platforms like Temu and Shein have already raised prices.

Shein and Temu Ramp Up Advertising in Europe

Shein and Temu, two major Chinese fast-fashion e-commerce companies, have significantly increased their digital advertising in Europe—particularly in the UK and France—amid mounting tariff challenges in the U.S. In April, Shein raised ad spending by 35% in both markets, while Temu increased its spending by 40% in France and 20% in the UK. This shift corresponds with a U.S. crackdown on de minimis trade exemptions, which previously allowed duty-free shipments under $800 and fueled their rapid American growth through ultra-low-cost goods.

Shein’s Political Ties Fail to Shield It from Tariffs

Shein, the ultra-fast-fashion giant, has faced severe setbacks following its close ties to Donald Trump’s administration. Initially striving to maintain an apolitical, borderless brand identity, Shein has increasingly engaged in behind-the-scenes lobbying in Washington, aligning itself with MAGA-affiliated figures. Despite these efforts, the Trump administration imposed harsh tariffs on Chinese imports and moved to close the crucial de minimis provision, threatening Shein’s economic model reliant on duty-free micro-shipments from China. These policy shifts, coupled with allegations of labor abuses and ties to China’s Xinjiang region, have hindered Shein’s IPO plans. Blocked from the U.S. stock market, the company is now seeking to go public in London at a drastically reduced valuation.

A New Era for Fast Fashion

For everyday Americans, these new tariffs could hit close to home. Many rely on Shein and Temu for affordable clothing, electronics, and household items—especially low-income families and students. With prices rising by 20–50% on common items, budgets will be squeezed, and some may cut back on non-essential purchases altogether. This could shift consumer habits toward more cautious spending or push shoppers to seek deals from U.S.-based discount chains, which may also raise prices due to broader supply chain impacts. Ultimately, the cost of living could edge higher for millions.