The end of cheap Shein and Temu is drawn? How Trump’s tariffs could make these shipments more expensive

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Cnn
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Americans love Shein, Temu and AliExpress for two reasons: Cheap Prices and Fast Shipment.

Trump’s tariffs could change that.

Trump’s customs orders returned a long-term shipping: the minimis exemption. The rule allowed international exporters to send packages worth less than the $ 800 inspection and duty free to the United States.

Chinese e-commerce sites have built their Gargantuian business models around this exception. They relaxed Restrictions and tax exemptions on cheap products have enabled more than a billion packs to pour at a cheap price for consumers looking for an appointment for household clothing.

But the Trump administration gets rid of the provision that made these items so cheap and easy to access.

“If you inspect each package, it will raise costs dramatically for consumers,” said Clark Packard, a research fellow at Cato Trade. “It will slow down the receipt of goods that were purchased.”

Currently, US Customs and Border Protection has authority to open and inspect all international packages, although in practice it does not open every item.

Trump adopted 10% tariffs on Chinese imports on Tuesday, adding a large number of tariffs placed on goods from the country in his first period. (Administration delayed a 25% customs order in Canada and Mexico until March 1) Beijing hit with a 15% tax on certain types of coal and liquid natural gas and a 10% duty on crude oil, agricultural machinery, large displacement cars and pickups.

The boundaries of a threatening trade war in the US China against Shein and Temu consumers have begun to seep in. On Tuesday, the united states’ postal service temporary acceptance of international packages from China and Hong Kong so far suspended. It did not give a reason for the change but said in A statement The flow of letters would not be affected.

The minimis determination has been around since the 1930s, but the threshold has increased over the years. It is intended to facilitate trade and help consumers, Packard told CNN.

The exception means that buyers do not have to fill in tired customs paper or pay tariffs on small packages.

In September 2024The Biden -Administration announced that it was cracking down on what it called the abuse of the minimis exemption, and said that shipments in the last decades increased from approx. 140 million a year to over a billion.

The exponential increase made it more challenging to enforce trade legislation and also posed challenges for US workers and businesses, maintaining US consumer protection laws and fighting the fentanyl trade.

The Trump administration said the suspension will stop shipments of Fentanyl from Mexico and Canada in small packages.

Politicians already want to work hard against China, said Rob Handfield, professor of supply chain management at North Carolina State University. The United States also has concern about fast fashion work in China, although the administration has not specified why China is targeted.

The minimis exemption is the reason why these Chinese goods are so cheap for US customers, said Christopher Tang, a professor of Global Supply Chain Management at the University of California, Los Angeles. More than 80% of the total US E-Commerce Submits in 2022 Were they minimi’s import, according to a congressional research report.

During the first Trump administration, “consumers basically wore 90 to 100% of the cost of a duty,” Packard said. “So if the similar dynamics exist, consumers could expect a 10%increase if it comes from China.”

Customs are not equipped to deal with this change level and it can cause other delays, Handfield said.

“The operations would be terrible about implementation,” Tang said.

In 2024, Temu ran an ad under the Super Bowl (in a $ 6.5 million interval to $ 7 million for a 30-second place) with $ 14 million in coupons and gifts. The Boston-based company-owned by PDD (PDD), the group behind Chinese online shopping giant Pinduoduo paid for three ads during the game and two after the game.

Whether it will happen at this year’s Super Bowl in February is now in doubt.

Cutting the exemption could, according to a Bank of America Research Note significantly tapered the growth of Chinese e-commerce companies, according to a Bank of America research note. These cuts could hit the marketing budget.

Americans are used to seeing Temu and Shein everywhere. Revenue from China-based advertisers grew from 6% of Meta’s family of apps revenue to 11% by 2024, according to the company’s financial reports. Bank of America estimated that Temu and Shein exposure could be 2% to 4% of AD for Google and Meta.

To get around this, companies can expand their stocks in the US, Tang said. They can send bulk amounts through customs and then resmit it across the United States – but customers still have to pay the import tax. Perk would be that could create more American jobs, Tang said.

Companies could also send products to other ASEAN countries like Vietnam and send it to the United States there, but the extra shipping costs would also eventually seep down to customers.

CNNS Eric Cheung and Simone McCarthy contributed to this report.