Are you a fan of Temu and Shein? If you’ve accumulated a collection of their products, you’re not alone.
Many shoppers are drawn to these apps for their incredibly low prices. However, a recent report suggests that changes initiated by former President Trump could significantly alter the shopping experience.
His proposed tariffs might increase the costs associated with Temu and Shein by as much as 30%. A report by House Republicans highlights that nearly half of all “de minimis” shipments to the U.S. come from China.
Of those shipments, a substantial third consists of packages from Temu and Shein. The term “de minimis,” which means insignificant in Latin, refers to a rule that allows goods worth up to $800 to enter the U.S. without incurring import taxes.
Trump initially revoked this exemption when he imposed tariffs on various international trade partners. This tax loophole has benefited Temu and Shein immensely.
Large U.S. retailers importing thousands of items face substantial import taxes, which ultimately affect consumer prices. Conversely, individual shoppers ordering lower-value items, such as a pair of jeans under $800, enjoy the benefit of tax-free shipping.
Amazon is also facing challenges due to these tariffs. The company launched its Haul platform, which offers inexpensive goods, many of which are sourced from China, akin to Temu’s offerings.
Although the exemption was briefly suspended this February, it was reinstated, allowing for a period of adjustment for Customs and Border Protection. Moving forward, low-value imports will now incur either a 30% duty or a flat fee of $25, which will increase to $50 per item after June 1.
Companies like Shein and Temu, which have sidestepped billions in tariffs, could soon feel the impact of these changes. Since 2015, imports of low-cost goods have escalated from $139 million to an expected $1.36 billion annually by 2024, amounting to approximately $66 billion overall, according to the Peterson Institute for International Economics.