The US's end to duty-free and customs-checked policies for low-value goods has made many products sold on Temu and Shein no longer cheap.
On April 25, two major Chinese online retail platforms began raising prices on many items, in preparation for the imposition of import tariffs starting next week. Both companies notified customers of the price increases last week.
CNN reported that two outdoor chairs were sold for $61.72 on Temu on April 24. However, by the morning of April 25, the price had increased to $70.1. On Shein, a swimsuit that cost $4.40 on April 24 increased by 91% the next day, to $8.40.
Temu and Shein’s strength is low-cost goods made in China and shipped directly to the US. They have previously benefited from a de minimis policy that allows packages worth less than $800 to be exempt from customs duties and inspections.
However, under an executive order signed by US President Donald Trump this month, that benefit will no longer be available from May 2. The tax on low-value goods from China entering the US via the post will be 120% of the value of the item, or $100 per item. From June, the tax will double to $200 per item.
However, the price increase has not been across the board. A smart ring on Temu is now selling for $3 less than it did on April 24.
"Due to recent changes in global trade regulations and import tariffs, our operating costs have increased. To continue to provide you with the products you love without compromising on quality, we will be adjusting our prices," Shein said on its website. It said it was doing everything it could to keep prices low and minimize the impact on consumers.
Temu posted a similar statement, citing changes in global trade and tariffs. It said it would "start adjusting prices from April 25, 2025."
Both platforms are encouraging customers to shop before April 25 to avoid paying higher prices. However, it is unclear whether shoppers will be able to avoid the 120% tariff if their orders arrive after May 2.
Based on data from the US Bureau of Labor Statistics, the report by Trade Partnership Worldwide shows that the ratio of clothing spending to income of low-income families in the US is three times higher than that of wealthy families.
Research by economists at the University of California - Los Angeles and Yale, published in February, also showed that ending "de minimis" will have a heavier impact on low-income households.
A June 2023 report by the US Congress said that Temu and Shein account for more than 30% of the goods delivered to the US under the de minimis policy every day. In 2023, the world's largest economy imported $66 billion worth of low-value Chinese goods, a sharp increase compared to $5.3 billion in 2018.
(according to Reuters, CNN)