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Chinese retail giants Shein and Temu see US sales slump after Trump’s ‘de minimis’ orders: report

by admin February 12, 2025
February 12, 2025
Chinese retail giants Shein and Temu see US sales slump after Trump’s ‘de minimis’ orders: report

Online shopping giants Temu and Shein have experienced a sustained decline in US sales following President Donald Trump’s announcement to revoke the duty-free exemption on small parcels under $800 from China.

The move, which affects the majority of their shipments, appears to have dampened demand among American consumers accustomed to ultra-cheap products.

According to Bloomberg Second Measure, Shein’s US sales fell between 16% and 41% in the five days following February 5, while Temu recorded a decline of up to 32% during the same period.

Although this drop is comparable to typical post-holiday spending slowdowns, it marks a reversal of the growth trend seen in late January.

Trump’s changes spell bad news for Shein and Temu

The pullback in sales began a day after Trump’s announcement, despite the fact that the revocation has yet to be fully implemented.

President Trump later delayed the removal of the duty-free exemption until systems to collect tariffs were in place.

Analysts believe consumer fears over potential additional fees may have contributed to the decline.

The uncertainty, coupled with disruptions and price hikes in the wake of the announcement, has likely weighed on spending.

Both Shein and Temu are exploring strategies to reduce the impact of the impending tariffs, as per the report.

Shein is encouraging some of its top Chinese apparel suppliers to establish production facilities in Vietnam, while Temu is restructuring its supply chain with a “half-custody” framework to adapt to the new trade environment.

The postal ban/unbans add to confusions

The US Postal Service initially announced it would stop accepting inbound packages from China and Hong Kong following the rule change but reversed its decision less than a day later.

Even after the reversal, Hongkong Post announced that it would continue suspending the shipment of packages containing goods to the United States until further notice.

In a statement, the Hong Kong government clarified that Hongkong Post was still in discussions with the US postal administration to address unresolved issues, including a tariff imposed on Hong Kong products.

The government expressed strong disapproval of the US decision to impose additional duties on goods from Hong Kong, calling for urgent rectification of what it described as a wrongdoing.

Now earlier this week, Hongkong Post announced that it has resumed accepting parcels bound for the United States, following confirmation from Washington that no additional tariffs would be imposed on packages from Hong Kong.

How hard will Trump’s de minimis reversal hit Temu and Shein?

Shein and Temu have managed to keep prices low, in part due to the “de minimis” loophole, which permits items valued under $800 to enter the United States without import taxes.

This loophole has contributed to a significant rise in low-value shipments, with the number of de minimis entries increasing by more than 600% over the decade until fiscal year 2023, according to US Customs and Border Protection.

A US congressional report attributes more than 30% of these de minimis packages to Shein and Temu, underscoring their dominant role in leveraging this provision.

The removal of the “de minimis” rule, once fully implemented, is expected to have a major impact on Chinese retailers shipping small parcels to the US.

Last year, companies like Shein and Temu shipped an estimated $46 billion worth of such parcels, according to Nomura Holdings Inc.

The post Chinese retail giants Shein and Temu see US sales slump after Trump’s ‘de minimis’ orders: report appeared first on Invezz

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