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Trump’s De Minimis Cancellation: A Blow To Shein, But Temu Adapts Quickly

by THEFUTURE.TEAM

February 6, 2025

The Trump administration’s move to cancel the de minimis rule, which allowed low-cost imports worth less than $800 to enter the U.S. tariff-free, could hit fast fashion retailer Shein harder than online dollar-store Temu. While both companies have relied heavily on this rule in recent years, Temu has adapted faster to mitigate the impact.

The de minimis rule enabled Chinese retailers like Temu and Shein to ship millions of packages to the U.S. without import duties. However, the Biden administration’s scrutiny of the rule prompted both companies to prepare for its eventual cancellation. Analysts and sellers noted that Temu, owned by PDD Holdings, quickly adjusted its model by expanding its semi-managed approach. This model, similar to Amazon’s, involves bulk shipments to overseas warehouses instead of direct shipments to consumers.

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By the end of 2024, about 20% of Temu’s U.S. sales were shipped from local U.S. warehouses, and by the end of the year, half of its U.S. sales were shipped through warehouses. Temu has also increased its use of ocean freight for larger, more valuable goods, such as furniture, reducing its reliance on de minimis shipments.

In contrast, Shein, known for its ultra-fast fashion, still relies heavily on air freight for rapid delivery, despite opening supply chain hubs in several U.S. states. Shein’s model focuses on speed and trend reactivity, making it less flexible than Temu when it comes to adapting to changes in shipping regulations.

Following Trump’s executive order, the U.S. Postal Service reversed a decision to stop accepting parcels from China and Hong Kong, adding to the confusion in the express shipping industry. Analysts predict that the volume of de minimis shipments to the U.S. could drop by 60%, raising prices for American consumers shopping from Shein, Temu, and Amazon Haul.

Despite these challenges, tech analyst Rui Ma believes that China’s e-commerce operators, including Shein and Temu, will quickly adapt, thanks to their competitive supply chains. While the short-term impact may be significant, Ma does not anticipate catastrophic consequences, as China’s e-commerce sector is highly agile and capable of finding solutions.

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A New Era in US Tariffs: How American Consumers Will Feel the Impact

by News Editor

May 3, 2025

Many Americans are now experiencing the direct effects of broad tariffs that earlier seemed distant. This shift stems from the recent expiration of the de minimis exemption, which had allowed goods valued at $800 or less to enter the US without duty. This exemption was a critical factor that enabled budget-friendly e-commerce platforms like Shein, Temu, and AliExpress to thrive in American households.

As this tax relief disappears, social media has been abuzz over the imminent increase in costs, with tariffs on Chinese imports possibly soaring up to 145%. This could lead to prices doubling for savvy shoppers previously reliant on low-cost imports.

Major shipping companies, including UPS and DHL, have stated their readiness to adapt to these changes, assuring customers of continued service despite the policy shifts.

From E-commerce Convenience to Tangible Trade Effects

The disappearance of the de minimis exemption will transform elaborate trade policy into a straightforward receipt, impacting consumer wallets directly. The initial phase of this policy change had already caused turmoil earlier this year when restrictions on imports from Hong Kong and China were implemented.

The issue of volume is significant, with congressional studies showing that 80% of all US e-commerce shipments in 2022 originated from China. Customs and Border Protection processes nearly 4 million of these shipments daily.

Consumer Reactions and Economic Impact

Low-income groups are expected to feel the most severe financial impact, as a significant portion of de minimis packages were destined for poorer areas. This trend sparks concerns about consumer spending and access to affordable goods.

Retailers are bracing for incremental price hikes, and some, including Shein and Temu, are adjusting business models to increase local fulfillment and minimize consumer impact. However, reports from platform users suggest that these efforts might not fully shield consumers from the fallout.

Despite preparations by major shippers, DHL has increased staffing to handle the anticipated surge in package clearances. Overall, goods shipped from China now face a baseline tariff increase, further constraining consumer options.

For American consumers, dealing with the end of de minimis exemptions means navigating higher prices, reflecting the broader complexities of global trade wars. As national policies shift, the challenge remains in balancing economic policy impacts with everyday consumer needs.