The ‘de minimis’ tax rule allowed imports from China and Hong Kong that are worth under $800 to enter the US duty-free – but this came to an end on May 2
A major tax exemption used by online retail giants including Shein and Temu has been closed by US President Donald Trump.
The “de minimis” tax rule allowed imports from China and Hong Kong that are worth under $800 to enter the US duty-free – but this came to an end on May 2. Imports under $800 now face a 120% tax rate or are subject to a flat fee.
The fee is $100 and is due to rise to $200 in June. Shein and Temu already raised prices last month for American shoppers after Donald Trump slapped 145% tariffs on all Chinese imports.
The Trump administration has claimed some Chinese goods now face levies of up to 245% due to existing tariffs that were already in place.
Beijing has retaliated with taxes of 125% on American goods following the fallout of the “Liberation Day” tariffs. There is a 90-day pause on tariffs for other countries, who face a blanket US tariff of 10%.
Shein and Temu sent nearly identical letters to customers last month to announce prices will go up from April 25. The companies said in statements: “Due to recent changes in global trade rules and tariffs, our operating expenses have gone up.
“To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025.”
The companies added: “We stand ready to make sure your orders arrive smoothly during this time. We’re doing everything we can to keep prices low and minimize the impact on you. Our team is working hard to improve your shopping experience.”
Shein, which was launched in 2008, specialises in fast fashion, whereas Temu, founded in 2022, sells everything from clothing to tech and homeware.
It comes after Shein and Temu were reported to have slashed how much they’re spending on advertising on US platforms. New data from Sensor Tower showed Temu cut its spending on platforms including Meta, X and YouTube by an average of 31% in the two weeks leading to April 13.
Temu has also axed all spending on Google ’s Shopping platform since April 9, according to Smarter Ecommerce. The daily average spend for Shein across Meta, TikTok, YouTube and Pinterest fell 19% in the first two weeks of April.