Chinese e-commerce giants Temu and Shein will raise prices for American consumers beginning April 25, 2025, as President Trump’s executive order ends a crucial tariff exemption that allowed them to dominate the US market with ultra-low prices.
Key Insights
- Temu and Shein will implement price increases starting April 25, 2025, directly resulting from Trump’s executive order closing the “de minimis” tariff loophole.
- The order eliminates duty-free treatment for Chinese imports under $800, a provision these companies leveraged to ship approximately one million packages daily to American consumers.
- Both companies have urged customers to purchase at current rates before the price adjustments take effect, though neither has specified how significant the increases will be.
- The move addresses concerns about China trade imbalances, potential labor abuses, and security risks, including the flow of synthetic opioids into the United States.
Trump Administration Closes Critical Tariff Loophole
President Donald Trump’s administration has moved decisively to close a tariff exemption that Chinese e-commerce platforms Temu and Shein have utilized to flood the American market with inexpensive goods. Through an executive order effective May 2, Trump will eliminate the “de minimis” rule that allowed duty-free entry of items valued under $800. This provision enabled these platforms to ship approximately one million packages daily to American consumers without paying import duties, giving them a significant competitive advantage over domestic retailers.
The White House described the move as “eliminating duty-free de minimis treatment for low-value imports from China, a critical step in countering the ongoing health emergency posed by the illicit flow of synthetic opioids into the U.S.” The administration’s action addresses mounting concerns from American lawmakers who claimed the exemption was being “exploited” to undermine domestic commerce and potentially facilitate the entry of illicit goods into the country.
With Trump's tariffs on China soaring past 100% on Wednesday, America's access to low-cost fast fashion retailers like Shein and Temu may soon change. https://t.co/uRou5eIYlq
— ReporterNews (@ReporterNews) April 10, 2025
Price Increases and Consumer Impact
Both Temu and Shein have notified their American customers about forthcoming price adjustments. Shein, which relocated its headquarters from China to Singapore, has directly informed customers that “due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025.” The company has urged consumers to make purchases “now at today’s rates” before the increases take effect.
“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up, To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025.” – Shein
Temu, owned by PDD Holdings, has issued a similar notice about upcoming price changes, assuring customers: “We’ve stocked up and stand ready to make sure your orders arrive smoothly during this time. We’re doing everything we can to keep prices low and minimize the impact on you.” While both companies have confirmed price increases, neither has specified exactly how much prices will rise, leaving American consumers uncertain about the full financial impact of this policy change.
Broader Trade Tensions and Market Response
The tariff exemption closure represents a significant escalation in US-China trade tensions. Trump has imposed tariffs of up to 145% on Chinese imports, with the potential for additional levies that could bring the total to 245%. China has retaliated with 125% tariffs on American exports, indicating a worsening trade relationship between the world’s two largest economies. This policy shift comes as both companies have already begun reducing their marketing presence in the American market.
“turned off all their Google Shopping ads in the US” – Mike Ryan
The companies’ app rankings have dropped significantly in the US Apple Store since the tariffs began, and they have substantially reduced advertising expenditures. Temu has eliminated Google Shopping ads completely and decreased social media advertising by 31%, while Shein reduced its US ad spending by 19%. Meanwhile, Amazon has launched “Amazon Haul” specifically to compete with these platforms, offering low-cost products under $20 and presenting American consumers with a domestic alternative to these Chinese platforms.
Industry Concerns and Regulatory Scrutiny
Beyond tariff considerations, both companies have faced significant criticism in the United States regarding their business models. Fast-fashion operations like Shein, which targets young women with inexpensive clothing and accessories, have drawn substantial scrutiny for potential environmental impacts, while both companies have faced allegations of labor abuses in their supply chains. US lawmakers have expressed growing concerns about the 1.4 billion packages that entered the country under the exemption last year.
Temu offers a wider range of products than Shein, including household items and electronics. Despite the tariff changes, other Chinese retail platforms like DHgate and Alibaba’s Taobao continue to maintain strong rankings in US app stores, indicating that American consumers’ appetite for direct-from-China purchases remains robust even as the regulatory landscape undergoes significant transformation. The full impact of these price increases on consumer behavior and market share remains to be seen.
Sources:
- Temu, Shein to raise prices for US consumers starting next week as Trump administration closes tariff loophole
- Temu and Shein, both founded in China, raising US prices due to tariffs
- Shein and Temu warn tariffs will raise prices in US
