An executive order signed on 30 July 2025 will suspend the long-standing “de minimis” exemption for all international shipments valued under $800, starting 29 August. This removes the duty-free benefit that major cross-border platforms like Shein and Temu relied upon, prompting both to announce price adjustments and restructure shipping models.
Online marketplaces specialising in ultra-low-cost goods are scrambling to recalibrate. Temu has already halted direct shipments from China to U. S. customers, shifting instead to fulfil all U. S. orders via domestic warehouses and local sellers—altering its supply chain radically. Shein, meanwhile, has signalled impending price increases to offset new duty costs. Tariff charges on incoming packages will range from flat fees of $80 to $200 for postal shipments over six months, before reverting to standard country-specific tariff structures.
Data underscores how pivotal the exemption had become to these firms. Shein and Temu collectively accounted for around 30 per cent of daily small-parcel imports by volume. In 2024 alone, more than 1.36 billion shipments worth nearly $64.6 billion qualified for the exemption—highlighting its profound influence on cross-border retail dynamics.
The impact on Shein and Temu has already been severe. In May, Temu’s U. S. sales plunged by roughly 23 per cent, while Shein’s sales dipped by about 11 per cent. Both slashed advertising budgets and diverted their promotional efforts toward markets abroad. However, by July, signs of recovery emerged: Shein posted a 12.8 per cent rebound in U. S. sales, and both are ramping up U. S. ad spending ahead of the holiday shopping season.
Industry analysts note that Temu appears better positioned to adapt. With an existing strategy of warehousing in the U. S., Temu’s supply chain is already partially localised—offering a softer landing. Shein, in contrast, still relies heavily on direct shipments from China and may face steeper cost pressures, particularly in fast fashion categories.
Consumers are already noticing the change. Reports from e-commerce platforms indicate added fees upfront, including pre-paid duties around $85 for single packages. Sellers on platforms like eBay and Etsy warn that the shift will hurt small artisans and independent businesses who thrived under the exemption.
Traditional retailers are capitalising on this transition. Amazon recorded an 11.6 per cent sales boost in July, while competitors such as Walmart and TJ Maxx are regaining ground in the value segment as imports from de minimis-dependent markets become less competitive on price.
Complex logistical challenges also loom. U. S. Customs and Border Protection anticipates a sharp rise in inspections and processing of small-value parcels. The sudden volume could strain infrastructure and slow delivery timelines, while imposing operational burdens on carriers and merchants alike.
Adaptation is already underway. Strategies such as establishing local fulfilment centres, diversifying supplier networks, and revising inventory models have gained urgency. Experts suggest these shifts will be critical in determining which players can retain market share in the evolving e-commerce landscape.
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