Shein and Temu Face Higher Costs as Trump Ends De Minimis Rule

Shein and Temu, two of the largest Chinese e-commerce retailers, are expected to face major cost increases after President Donald Trump eliminated the global trade loophole that allowed small-value imports to enter the U.S. duty-free.

Known as the “de minimis exemption,” the rule had allowed duty-free entry of goods valued at $800 or less. The Trump administration previously removed this exemption for shipments from China and Hong Kong in May, and the latest executive order extends the change to all countries worldwide.

The move, set to take effect August 29, will require that all international packages declare their country of origin to U.S. Customs and Border Protection and pay applicable import tariffs.

The rule is expected to affect low-cost retailers the most. Shein and Temu relied on de minimis shipments for hundreds of millions of packages sent to the U.S. each year. Without the exemption, they will now face tariffs ranging from $80 to $200 per item, depending on the exporting country’s tariff rate.

These new costs could be passed down to American consumers. Research indicates that nearly half of these small packages went to the poorest ZIP codes in the U.S., suggesting that low-income shoppers may be the hardest hit.

Temu, which shifted to shipping bulk orders to U.S. warehouses after the May changes, already saw price complaints from customers as stock shortages developed. Experts warn that no workaround remains now that the exemption is removed worldwide.

The policy change also impacts platforms like Amazon Haul and TikTok Shop, which have been competing with Temu in the discount retail space.

CBP processed nearly 1.36 billion de minimis shipments in the last fiscal year, averaging almost 4 million duty-free packages per day. With this change, those shipments will all be subject to tariffs, significantly altering the cost structure of global e-commerce.

Credit: CNN Newsource

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