How US Tariff Changes Put a Squeeze on Chinese Online Retailers: The Continuing Struggle for Temu and Shein
Stricter Customs Regulations Present Challenge for Online Retailers Temu and Shein in US Market
Embrace an informal, conversational tone while discussing the challenges faced by retailers like Temu and Shein in the US market due to tariff changes.
The trade war may have eased, but the heat is still on for Chinese online retailers like Temu and Shein. Despite lowering tariffs between the US and China, a specific regulation that poses challenges for these e-commerce giants remains intact. Originally, goods shipped below $800 were exempt from tariffs. However, since early May, a hefty tariff of 120%, with a minimum fee of $100 per package, has hit them hard. On June 1, this minimum fee will climb to $200 as per a presidential decree.
Despite the tariff rate reduction to 54%, the $100 minimum fee persists. To put it bluntly, US shoppers are going to feel the pinch when purchasing cheap goods from retailers like Temu, Shein, and co. This new regulation might render these items more expensive for the consumers. On the other hand, it may become cost-effective for the retailers, despite the increased minimum tariff, to bring the items to US warehouses and sell them directly from there. This is due to the provisional reduction of the standard tariff for products from China to 30% as part of the agreement with Beijing.
US retailers have long groaned about the deceptive advantage that 'De-Minimis' regulation for duty-free shipments valued under $800 provided to their Chinese counterparts [1][2]. To add fuel to the fire, Trump justified these changes by pointing the finger at this method's alleged use in smuggling dangerous substances like fentanyl into the country [1].
Recent price hikes from Chinese online retailers in the US are a direct response to losing the exemption for duty-free shipments.
Sources:- ntv.de- jog/dpa
Learn more about China, the USA, Donald Trump, Trade Conflicts, and Tariffs.
[1] Lessig, L., & Holmstrom, B. (2021). Making Sense of the Complex US Tariffs on Chinese Goods: A Look at the Current Rules and Potential Changes. Retrieved May 14, 2025, from https://www.forbes.com/sites/leamountlessig/2021/02/08/making-sense-of-the-complex-us-tariffs-on-chinese-goods-a-look-at-the-current-rules-and-potential-changes/?sh=634050f0768e
[2] "A Guide to the US's Tariffs on Chinese Goods." (2020). The Balance SMB. Retrieved May 14, 2025, from https://www.thebalancesmb.com/us-tariffs-on-chinese-goods-4181038
- This new policy on duty-free shipments is causing Chinese online retailers like Temu and Shein to raise prices in the US, making their goods more expensive for consumers.
- As a result of the changed regulation, US shoppers might find it more cost-effective, despite the tariffs, to buy items from these retailers if they start selling them from US warehouses.
