Those bargain-basement prices on Temu and Shein might soon be getting pricier.
President Trump’s new executive order placing significant tariffs on goods imported from Canada, Mexico, and China, contains a less talked-about change that could upend online shopping for U.S. Consumers and roil the cost structure and operations of fast-growing global shopping phenoms Shein and Temu.
The executive order, to take effect on Feb. 4, placed 25% tariffs on many imports from Canada and Mexico (though leaders from both countries announced deals to delay the tariffs by at least one month on Monday) and 10% tariffs on imports from China. The order would also essentially eliminate a century-old trade rule known as “de minimis” that lets overseas businesses send packages valued under $800 directly to U.S. Customers while avoiding import duties and extensive customs scrutiny.
Such exceptions have played pivotal roles in the rise of direct-from-China shopping apps Shein and Temu, as well as TikTok’s shopping marketplace, allowing merchants to avoid paying inbound duties and the costs associated with thorough customs vetting. As a result, investors hammered the stock of Temu’s parent company, PDD, which trades on the Nasdaq. Its shares fell 6% on Monday, shaving off more than $9 billion in market value as of early Monday afternoon, to $146 billion. Shein, on the other hand, is privately held.
Spokespeople for Temu and Shein did not respond to a request for comment.
The elimination of de minimis could also have an impact, though likely smaller, on U.S.-based shopping sites of Amazon, Walmart, and eBay. Those marketplaces include some listings from merchants that ship low-priced orders directly from China—or from warehouses near the U.S. Border in Mexico and Canada—directly to U.S. Customers, partly to avoid the added cost and processing time of non–de minimis shipments.
In November, Amazon introduced a Temu-like section of its app called Amazon Haul that appeared to almost exclusively feature direct-from-China merchandise. But most of Amazon’s sales from third-party merchants are first stored in Amazon warehouses, which disqualifies this merchandise from the de minimis exemption.
The Trump action comes months after former President Joe Biden, as well as a bipartisan group of senators, had taken separate steps to attempt to overhaul the de minimis rule. Just last month, a spokesman for Sen. Ron Wyden (D-Ore.) Told Coins2Day that the senator planned to soon reintroduce legislation to overhaul the trade loophole.
While some large American retailers and e-commerce brands have lobbied to eliminate the rule because they see it as an unfair pricing advantage for overseas brands and platforms, the Trump and Biden administrations have focused mostly on its connection to the fentanyl trade, as well as counterfeit and dangerous goods. In short, drug cartels have used the explosion of packages from China that receive little customs scrutiny via the de minimis rule to smuggle in ingredients used to create the deadly synthetic drug. The theory is that eliminating the loophole will both reduce the volume of inbound packages as well as make sure that the packages that do enter receive proper vetting.
In 2023 alone, the government said 1 billion packages were sent to the U.S. Via the de minimis shipping exemption, or several million daily. Almost two-thirds of the packages originated in China, or more than $60 billion worth last year.
If the change is implemented, Temu, Shein, and merchants selling through those apps could be forced to raise prices to account for the new duties and costs associated with more thorough customs inspections. Such a move could disrupt how tens of millions of Americans shop online today for low-cost items in part subsidized by the loophole.
In 2016, U.S. Lawmakers raised the de minimis threshold from $200 to $800, partly because the influx of low-priced goods from abroad was overwhelming customs staff. It’s yet to be seen how pushing more low-priced packages back through the formal customs entry process will impact processing times. One former government trade official told Coins2Day that recent customs processing automation efforts should help.
“It’s not going to upend the system,” said Nazak Nikakhtar, a partner at Wiley Law, who previously served as the Department of Commerce’s assistant secretary for industry and analysis at the International Trade Administration. “The burdens will be outweighed by how much automatization has and will take place at customs.”
Are you a current or former Temu, Shein, or Amazon employee with thoughts on this topic or a tip to share? Contact Jason Del Rey at [email protected] , [email protected] , or through messaging apps Signal and WhatsApp at 917-655-4267 . You can also contact him on LinkedIn or at @delrey on X, @jdelrey on Threads, and on Bluesky.
