US-China Tariff Pause Leaves Shein and Temu Imports Expensive

In May 2025, the United States and China announced a temporary pause in their ongoing trade war tariffs, signaling a new phase of cooperation. Over the next 90 days, China agreed to reduce duties on US imports from 125% to 10%, while the US lowered tariffs on Chinese imports from 145% to 30%. This development followed high-level talks in Geneva and was welcomed by volatile markets worldwide.

Despite this easing, a significant exception remains: Chinese shipments valued under $800 continue to face steep tariffs, taxed at 120% or a flat $100 per postal item, doubling to $200 starting June 1st. This exclusion directly impacts popular Chinese e-commerce companies like Shein and Temu, which heavily relied on the previous "de minimis" exemption to offer low-cost goods to American consumers.

The Trump administration justified closing the de minimis loophole as a measure to combat the synthetic opioid crisis, asserting that illicit substances were being smuggled in low-value packages. However, public discourse has largely focused on the impact on consumer goods such as sneakers, pillows, and drones sold by Shein and Temu.

In response, both Shein and Temu announced price increases starting April 25, 2025, citing higher operating expenses due to tariff changes. Temu later revealed plans to mitigate tariffs by shifting to a local distribution model, sourcing suppliers within the US. While this strategy helps avoid tariffs, it places Temu in direct competition with established American retailers like Amazon and Walmart.

The competitive landscape is further complicated by Amazon’s launch of Amazon Haul, a discount platform aimed at countering the popularity of Shein and Temu. Although Amazon considered displaying import charges on its site, it ultimately decided against the move after discussions with government officials.

Traditional American retailers are feeling the pressure. Forever21, a fast fashion staple, filed for bankruptcy in March 2025, attributing part of its financial struggles to competition from Shein and Temu exploiting the de minimis exemption to undercut prices.

The evolving tariff landscape underscores the complex interplay between trade policy, consumer behavior, and global supply chains. While tariff reductions may ease some tensions, the exclusion of small shipments from tariff relief maintains pressure on e-commerce pricing and distribution strategies.

For consumers, this may mean higher prices and a reconsideration of the appetite for low-cost imports. For businesses, it presents both challenges and opportunities to innovate supply chains, localize operations, and compete in a shifting market environment.