Chinese e-commerce site Temu and fast fashion retailer Shein will be raising their prices starting April 25 due to tariffs imposed by President Donald Trump.
Shein and Temu, in separate but almost identical notices, wrote that the tariffs will drive up operational costs, leading to price increases.
“We’re doing everything we can to keep prices low and minimize the impact on you,” Shein said in a statement.
This comes after Trump imposed 145% tariffs on China, which means Chinese goods will be taxed 2.45 times the original price in the U.S. China responded with retaliatory tariffs of 125%.
In a statement, The White House said, “President Trump is targeting deceptive shipping practices by Chinese-based shippers, many of whom hide illicit substances, including synthetic opioids, in low-value packages to exploit the de minimis exemption.”
Products that are usually shipped to the U.S. that are under $800 fall under the “de minimis” exemption loophole, which exempted companies from paying duty-free and import tariffs.
ABC 11 reported that around 4 million low-value parcels arrive to the U.S. every day, most of which are from China.
However, on April 2, Trump signed an executive order that eliminated “de minimis” exemption.
The biggest users of the customer exemptions have been e-commerce retailers.
Business groups, politicians and law enforcement have lobbied to stop the exemption, as the loophole gave China the advantage.
China’s commerce ministry responded in a statement by warning the U.S. that it will take “corresponding countermeasures” if deals are made at the expense of Chinese interests.
Temu and Shein gained popularity in the U.S. for their cheap products. Shein blouses can be as little as $4, and Temu running sneakers can be $14. Neither company has clarified the magnitude of their “price adjustments.”
Once the two largest ad spenders on social media, Shein and Temu are beginning to cut back. Digital market insights platform Sensor Towers estimated that Temu’s daily average on ad spending in the U.S. on social media platforms such as Instagram, TikTok, Snapchat, X, Facebook, and YouTube lessened 31% from March 31 to April 13.
For Shein, daily ad spending in the U.S. declined 19% over the same period on Facebook, Pinterest, Instagram and TikTok.
In November 2024, Amazon tried to join the Shein and Temu affordability rating by launching a low-cost storefront online with products priced under $20. However, its operations also work in China and would be affected by the tariff hike.
With the tariffs expected to affect multiple companies, Trump’s plan is to “restore national and economic security” with the tariffs.
The White House press release explained that the tariffs are built to “reduce the trade deficit” for more U.S. consumers to buy from the country.
However, with higher labor wages and higher costs, consumers prefer to spend money on affordable sites compared to domestic products.