Shein, Temu, Amazon Haul set for price hikes
NEW YORK/LONDON — Shein, Temu and Amazon Haul prices are likely to rise for American shoppers, analysts and industry experts said, after US President Donald Trump this week shut a trade loophole that has been used to ship low-value packages duty-free from China.
Fast-fashion retailer Shein and online dollar-store Temu, both of which sell products ranging from toys to smartphones, have grown rapidly in the US thanks in part to the “de minimis” exemption enabling them to keep prices low.
Temu and Shein together likely accounted for more than 30 percent of all packages shipped to the United States each day under the de minimis provision, the US congressional committee on China said in a June 2023 report.
Trump’s halt to Section 321 de minimis is part of his implementation of an additional 10-percent tariff on China and 25-percent tariffs on Canada and Mexico, which were paused for a month. Nearly half of all packages shipped under de minimis come from China, according to the same committee report.
“For companies like Temu and Shein this is obviously a very big deal because de minimis was one of the levers they used to be able to offer these low prices as well as ensure speed of products entering the country once they were shipped,” said Juozas Kaziukenas, CEO of e-commerce data firm Marketplace Pulse.
Smaller players
Temu did not immediately reply to a request for comment. Shein did not immediately reply to a request for comment. It has previously said it supports reform of the de minimis provision.
“It’s probably about 5 points of margin difference, using de minimis or not, and e-commerce businesses usually have a 10 percent or 15 percent margin, so this is a very significant impact,” said Aaron Rubin, CEO of warehouse management software firm ShipHero.
ShipHero’s clients include logistics firms and small and mid-sized online retailers, which also benefit from the loophole, and have less financial capacity to absorb the hit.
Amazon set up Amazon Haul in November. This allows shoppers to purchase $5 handbags and $10 sweaters from China-based sellers, although they face longer shipping times.
While Trump’s crackdown on de minimis is likely to bruise Amazon Haul, said CFRA analyst Arun Sundaram, it is a new, and very small part of Amazon’s overall e-commerce business.
And shoppers in the US can buy products similar to those found on Haul, including $2 pencil sharpeners and $10 pajama sets, on Amazon’s main e-commerce site at more expensive prices.
Both Temu, a subsidiary of Chinese e-commerce giant PDD Holdings, and Singapore-headquartered Shein, which plans to list in London this year, have taken measures such as sourcing more products from outside China, opening US warehouses and bringing more US sellers on board, to mitigate the impact.
Both companies have brought more US and European sellers onto their platform and established warehouses in the US.
The vast majority of Shein’s products are still made in China, but it has started to diversify its supply chain, adding suppliers in Brazil and Turkey.
