US plans to triple small-parcel shipping fees could unravel Shein and Temu’s fast-fashion dominance
Bargain hunting is about get a lot more expensive.
As the US-China trade war heats up, President Trump is slapping higher fees on small parcel shipments, closing a loophole that’s helped flood American closets and homes with cheap Chinese goods.
On Wednesday, the president announced that imports valued up to $800 would be taxed at 90% of their value, up from a previously proposed 30%. That’s not all: starting May 2, the postal fee on incoming goods will rise to $75 per item, up from $25. On June 1, that fee jumps again — to $150 per item.
It’s a massive blow for China-based fast-fashion giants like Shein and PDD Holdings-owned Temu, which have raked in billions in US sales by leaning on the so-called de minimis loophole, a decades-old rule that lets small parcels enter the country duty-free. The Biden administration had already moved to phase out the exemption, but Trump is cranking it up a notch with steeper parcel fees and a tighter timeline.
While both retailers have claimed their low prices don’t rely on the loophole, that argument will soon be put to the test. Even before this latest hike, analysts estimated closing the gap could force Shein and Temu to raise prices by up to 20%, chipping away at the irresistible value that made them go-to outlets for Gen Z and millennial shoppers. Over half of US online shoppers aged 15-42 made a purchase on Temu in the last half of 2024 alone.
