President Donald Trump’s policies increasing duties and tariffs on products imported from China announced on Wednesday could pose an existential threat to Chinese low-quality, cheap goods shopping sites such as Shein and Temu, experts warned.
Shein, which primarily specializes in inexpensive and poorly made women’s clothing, and Temu, which sells clothing, home goods, and other items of murky origin to Americans, both rely on the use of mobile phone apps to provide instant access to “fast fashion” and rapid consumption for Americas. The extreme discounts are a result of two policies: shipping the products directly from China to the consumer, rather than importing them in large quantities, and — according to Congress and other verifiable sources — the widespread use of slavery in the Chinese manufacturing sector, including slaves imprisoned as part of the ongoing Uyghur genocide.
The low prices and immediacy of the shopping experience have made both of the applications tremendously popular among American consumers. Shein reported a record-high $2 billion in profits in 2023 and reportedly dropped by about half that in 2024 — but largely, apparently, due to competition from Temu. Pinduoduo, the parent company of Temu, tallied a net profit of $8.3 billion in 2023, based on the latest publicly available statistics.
Both have profited at the expense of American companies and brick-and-mortar establishments. In March, for example, the women’s clothing company Forever 21 filed for bankruptcy, stating in its filing that the fact that it imports its clothing to stores rather than shipping directly, as Shein and Temu do, was a significant factor in its decline.
“Certain non-U.S. online retailers that compete with the Debtors, such as Temu and Shein, have taken advantage of this exemption and, therefore, have been able to pass significant savings onto consumers,” Stephen Coulombe, a co-chief restructuring officer with Forever 21’s operating company, said. “Consequently, retailers that must pay duties and tariffs to purchase product for their stores and warehouses in the United States, such as the Company, have been undercut.”
For years, the two Chinese companies paid no duties or tariffs on their shipments due to a rule known as the de minimis loophole, which states that any package shipped from abroad worth less than $800 does not need to pay such fees, nor does it receive the scrutiny a larger import shipment would face to ensure compliance with anti-slavery laws. Temu and Shein packages are rarely worth anywhere near $800, creating a massive opportunity for the China-based companies.
President Trump announced an attempt to close the de minimis loophole in February, but paused the process to allow American government agencies to prepare for the logistics of processing the large volume of packages affected by the rule. As of this week, the de minimis loophole will end on May 1; Temu and Shein will have to pay duties on their packages beginning on May 2.
Beyond closing the loophole, however, President Trump increased duties on de minimis packages in an executive order on Wednesday. The executive order contains a provision that increases the ad valorem rate of duty on de minimis packages from China from 90 percent to 120. These packages will also see an increase of a duty per postal item from $75 to $100 on May 1, and from $150 to $200 on June 1.
“In my judgment, this modification is necessary and appropriate to effectively address the threat to U.S. national and economic security posed by the PRC’s [China’s] contribution to the conditions reflected in large and persistent trade deficits,” Trump wrote in the executive order, “including PRC industrial policies that have produced systemic excess manufacturing capacity in the PRC and suppressed U.S. domestic manufacturing capacity, which conditions are made worse by the PRC’s recent actions.”
The magazine PC World explained that U.S. Customs and Border Protection (CBP) will have the option to “choose whether to tariff your shipment by 90 percent, or $75 per item,” in an article written before the increase to 120 percent. Either way, the increase is expected to dramatically raise prices on China’s top discount apps.
Speaking to the website Newsweek, University of Delaware professor Sheng Lu concluded that Shein and Temu would “definitely” be “directly and significantly affected” by Trump’s policies.
“High tariffs combined with the loss of de minimis benefits could limit Shein’s product offerings in the U.S. market,” Lu explained. “As a result, other fashion companies currently competing with Shein may feel more confident in raising their prices, given the reduced supply in the market.”
“There’s no way either for retailers or for their suppliers to absorb the additional cost,” Lu added.
Shein and Temu rely heavily on “influencers” on the toxic Chinese social media app TikTok to promote their items, often through “hauls” where they buy a large number of unnecessary items and promote similar behavior by their viewers. These “influencers,” the tech site The Verge noted this week, are already preparing to use the sites less due to the expected increase in prices. The Verge’s reporting preceded the latest round of increasing tariffs and duties on Chinese products.
“I love doing haul videos, and sharing affordable finds is such a big part of how I connect with my followers,” one “influencer,” identified as Donna Leah, told the outlet. “But when the prices jump so drastically, it kind of kills the excitement. And honestly, it makes me think twice about buying anything at all.”
“I think we’ll be seeing fewer AliExpress or Shein Hauls in my content going forward, just because the reality is: it’s only going to get more expensive,” she added, suggesting she may soon shift her content to more environmentally sound options such as buying second-hand products.
“Fast fashion” and mass consumption of inexpensive, often toxic items on Chinese e-commerce sites has been identified as a major environmental hazard. Yale University’s Climate Connections initiative identified Shein in September as “the biggest polluter in fast fashion” in September, citing its “prolific manufacturing,” massive carbon footprint, and use of artificial intelligence to expedite its production even more. The government of South Korea, meanwhile, announced in August that it had found evidence of toxic substances present in products sold on Shein and Temu, as well as competitor Chinese e-commerce site, AliExpress.
Shein and Temu have also both been implicated in Chinese state-sponsored slavery. A 2023 report by the House Select Committee on the Chinese Communist Party confirmed that there was an “extremely high risk” of Americans buying products whose supply chains were tainted by slavery if patronizing either business.
“Temu is doing next to nothing to keep its supply chains free from slave labor,” House Select Committee on the Chinese Communist Party chair Rep. Mike Gallagher (R-WI) stated. “At the same time, Temu and Shein are building empires around the de minimis loophole in our import rules — dodging import taxes and evading scrutiny on the millions of goods they sell to Americans.”
Some evidence suggests the Chinese government has pressured Shein in particular — which has reportedly sought other countries with better records on slavery to manufacture in — not to leave the country. On Tuesday, Bloomberg News reported, citing anonymous sources, that the Chinese Ministry of Commerce is working “with Shein and other companies to discourage them from diversifying supply chains by sourcing from other countries.” Shein was reportedly shopping for potential locations in Vietnam and other regional countries.
Follow Frances Martel on Facebook and Twitter.
The post Trump Tariff Policy Could Crush China’s Slave-Linked Temu, Shein Shopping Apps appeared first on Breitbart.
