The end of cheap Shein and Temu hauls? How Trump’s tariffs could make those shipments more expensive – CNN

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Americans love Shein, Temu and AliExpress for two reasons: low prices and fast shipping.

Trump’s tariffs could change that.

His tariff orders reversed a long-standing shipping loophole: the de minimis exemption. The rule allowed international exporters to ship packages worth less than $800 inspection- and duty-free into the United States.

Chinese e-commerce sites have built their gargantuan business models around this exemption. The relaxed restrictions and tax exemptions on cheap products has allowed more than a billion packages to pour in at a low-cost price for consumers looking for a deal on clothing to household goods.

But the Trump administration is getting rid of the provision that made these goods so cheap and easy to access.

“If you inspect every package, it’s going to raise costs dramatically for consumers,” Clark Packard, a research fellow at Cato Trade, said. “It’s going to slow down the reception of goods that were bought.”

Currently, US Customs and Border Protection has the authority to open and inspect all international packages, though in practice it doesn’t open every single item.

Trump enacted 10% tariffs on Chinese imports on Tuesday, adding to a wide array of tariffs that were placed on goods from the country during his first term. (The administration delayed a 25% tariff order on Canada and Mexico until March 1.) Beijing hit back with a 15% tax on certain types of coal and liquefied natural gas and a 10% tariff on crude oil, agricultural machinery, large-displacement cars and pickup trucks.

The ramifications of a looming US-China trade war have begun to trickle in for the customers of Temu and Shein, which is headquartered in Singapore. Late on Tuesday, the US Postal Service suspended the acceptance of international parcels from China and Hong Kong until further notice — but this was quickly reversed Wednesday morning when USPS announced it would continue accepting those packages.

Although no reason was given for the initial suspension, the Postal Service suggested Wednesday that it was related to the new tariffs and the elimination of the de minimis exemption.

The de minimis provision has been around since the 1930s, but the threshold has increased over the years. It’s meant to ease trade and help out consumers, Packard told CNN.

The exemption means buyers don’t have to fill out tiresome customs paperwork or pay tariffs on small packages.

In September 2024, the Biden administration announced it was cracking down on what it called abuse of the de minimis exemption, saying that over the past decade shipments increased from about 140 million a year to over a billion.

The exponential increase made it more challenging to enforce trade laws and also posed challenges for American workers and businesses, upholding US consumer protections laws and combatting the fentanyl trade.

The Trump administration said the suspension will stop shipments of fentanyl from Mexico and Canada in small packages.

Policymakers already want to appear tough on China, said Rob Handfield, a professor of supply chain management at North Carolina State University. The US also has concerns over fast fashion labor practices in China, though the administration has not specified why China is targeted.

The de minimis exemption is why these Chinese goods are so cheap for US customers, said Christopher Tang, a professor of global supply chain management at the University of California, Los Angeles. More than 80% of total US e-commerce shipments in 2022 were de minimis imports, according to a congressional research report.

During the first Trump administration, “consumers bore basically 90 to 100% of the cost of a tariff,” Packard said. “So, if that similar dynamic exists, consumers could expect a 10% increase if it’s coming from China.”

Customs is not equipped to handle this level of change, and it could cause other delays, Handfield said.

“The operations would be horrendous in terms of implementation,” Tang said.

Christine McDaniel, senior research fellow at George Mason University’s Mercatus Center, also noted that taking away the de minimis carve-out would impact not just Temu and Shein but also Amazon, eBay, Etsy and other retailers that ship from China.

In 2024, Temu ran an ad during the Super Bowl (at a range of $6.5 million to $7 million for a 30-second spot) with $14 million in coupons and giveaways. The Boston-based firm — owned by PDD (PDD), the group behind Chinese online shopping giant Pinduoduo — paid for three ads during the game and two after the game.

Whether that will happen at this year’s Super Bowl in February is now in question.

Cutting the exemption could significantly taper the growth of Chinese e-commerce companies, according to a Bank of America research note. That slowdown could hit their marketing budget.

Americans are used to seeing Temu and Shein everywhere. Revenue from China-based advertisers grew from 6% of Meta’s family of apps revenue to 11% in 2024, according to the company’s financial reports. Bank of America estimated Temu and Shein exposure could be 2% to 4% of ad spend for Google and Meta.

To get around the exemption’s disappearance, companies can expand their warehouses in the US, Tang said. They can ship bulk amounts through customs and then reship it across the US – but customers will still have to pay the import tax. The perk: This could create more US jobs, Tang said.

The companies could also ship products to other ASEAN countries such as Vietnam and ship it to the US there, but the extra shipping costs would also eventually trickle down to customers.

There was more potentially bad news for Temu and Shein out of Europe Wednesday. The European Union said it would control imports of low-value products from such websites more tightly as it unveiled a number of actions to tackle “the surge of unsafe, counterfeit and otherwise non-compliant or illicit products” entering the bloc.

CNN’s Eric Cheung, Simone McCarthy, Olesya Dmitracova and Matt Egan contributed to this report.
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Source: https://www.cnn.com/2025/02/05/business/shein-temu-alibaba-china-tariffs-de-minimis/index.html