Will Shein and Temu Hauls Become Costlier? Trump’s Tariffs May Change the Game

American shoppers have flocked to Shein, Temu, and AliExpress for two key reasons: affordability and quick delivery. However, new tariff regulations introduced by the Trump administration could soon make these budget-friendly hauls significantly more expensive.

A Shift in Shipping Policies

A major factor behind the low prices of Chinese e-commerce platforms has been the de minimis exemption, a long-standing rule allowing international shipments valued under $800 to enter the U.S. without facing duties or inspections. This loophole has enabled platforms like Shein and Temu to flood the market with cost-effective products, from clothing to household essentials.

However, the Trump administration has now decided to eliminate this exemption, making it more difficult and costly for these companies to continue their operations as usual.

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

While U.S. Customs and Border Protection (CBP) already holds the authority to inspect all international shipments, it currently does not examine every single package. If enforcement intensifies, consumers may experience higher prices and longer delivery times.

Tariffs and Trade Tensions

On Tuesday, Trump imposed a 10% tariff on Chinese imports, expanding the list of goods already subject to trade penalties from his first term. The administration has postponed a 25% tariff on imports from Canada and Mexico until March 1. In response, China has retaliated with its own set of levies, including a 15% tax on some coal and liquefied natural gas, as well as a 10% tariff on crude oil, large vehicles, and agricultural machinery.

As part of this ongoing trade battle, the United States Postal Service (USPS) announced a temporary suspension of international parcel shipments from China and Hong Kong. While no official explanation was provided, USPS confirmed that regular letter deliveries would not be affected.

Understanding the De Minimis Rule

The de minimis exemption dates back to the 1930s, with its threshold increasing over time to facilitate trade and consumer convenience. This rule allows customers to avoid cumbersome customs paperwork and additional tariffs on low-value shipments.

In September 2024, the Biden administration had already taken steps to address concerns about potential abuse of the exemption, noting that annual shipments had surged from around 140 million to over a billion in just a decade. Critics argue this rapid growth has made enforcing trade laws more difficult, raised concerns about labor conditions in China’s fast fashion industry, and contributed to illegal fentanyl shipments.

The Trump administration has now stated that stricter regulations will help curb fentanyl smuggling from Mexico and Canada.

Impact on Consumers

Chinese e-commerce platforms rely heavily on the de minimis provision to keep costs low for U.S. shoppers. According to Christopher Tang, a global supply chain expert at UCLA, more than 80% of all e-commerce shipments to the U.S. in 2022 fell under this exemption.

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

Experts also warn that U.S. customs may struggle to adapt to the heightened inspection requirements, leading to additional delays. "The operations would be horrendous in terms of implementation," Tang added.

Adapting Business Strategies

Temu has aggressively expanded its presence in the U.S., even running high-profile Super Bowl ads in 2024, which cost an estimated $6.5 million to $7 million per 30-second slot. However, whether it will maintain this level of marketing in 2025 remains uncertain.

A report from Bank of America suggests that cutting the de minimis exemption could slow the growth of Chinese e-commerce giants, potentially affecting their advertising budgets. Data from Meta indicates that revenue from Chinese advertisers jumped from 6% to 11% of the company’s total ad earnings in 2024, with Shein and Temu accounting for a significant portion.

To counteract these tariffs, companies may seek alternative strategies. One option is expanding warehouse operations in the U.S. to ship bulk goods through customs before redistributing them domestically. "That could create more U.S. jobs," Tang noted, though consumers would still shoulder import taxes.

Another workaround could involve routing shipments through ASEAN countries like Vietnam before delivering them to the U.S., but this approach would likely increase overall shipping costs, ultimately being passed on to buyers.

The Future of Affordable Imports

With the Trump administration tightening trade regulations, the era of ultra-cheap Chinese imports may be coming to an end. While Shein, Temu, and AliExpress might adjust their business models, consumers should brace for higher prices and longer shipping times as new policies take effect.