Experts and insiders say Donald Trump’s tariff suspension provides Temu and Shein with temporary windows of opportunity to restorate U.S. warehouses and reevaluate their supply chain management.
On Monday, the United States and China agreed to reduce tariffs on most Chinese imports to 30% within 90 days. The agreement includes relaxation of the so-called "minimis" rule, which will take effect on Wednesday, which will allow low-value packages now shipped from China to the U.S. to be taxed at a 54% tariff rate, down from 120% before.
Previous tariff rates have caused prices for U.S. consumers on Shein's platform to rise. Meanwhile, Temu completely stopped direct goods from China, resulting in some interference in fulfilling U.S. orders.
But the recent tariff cuts have given them the opportunity to increase Chinese goods and restock and fulfill existing orders, supply chain experts said.
"In the short term (Temu and Shein) will certainly increase their shipping volume to the United States," said Anand Kumar, associate director of research at Coresight Research.
According to Jason Wong, who works for Temu's product logistics in Hong Kong, his company has stalled from China after the waiver of the "De Minimis" and relied on U.S. stock to fulfill orders.
Under the latest tariff policy, Wong expects large goods that are subject to a 30% tariff rate to be restored to the United States and replenish those stocks.
30% is still high, but compared to 125%, basically no 30%. ” he added.
However, for small value packages under "de minimis", the tariff situation remains more complicated.
The latest policy update retains a fixed fee of $100 per postal program, while increasing the previously planned increase to $200 to $200 in June, according to an executive order issued by the White House on Monday.
According to Huang, tariffs still need to be further relaxed to restore small-value goods from China to the United States - according to Huang - which he expects will happen eventually.
Shein hasn't said it's ending direct shipping from China. However, it says on its platform that “the price you pay includes tariffs.”
Kumar of Coresight said tariff reductions on low-value kits shipped from China to the U.S. could lead to some price reductions.
In an effort to expect changes to the “De Minimis” exemption, Shein has also expanded its supply chain to build manufacturing operations in countries such as Türkiye, Mexico and Brazil. It also reportedly plans to transfer production to Vietnam.
Shein and Temu did not immediately respond to CNBC requests for comment.
On May 2, Trump terminated a "very small amount" of exemption policy, which analysts criticized for hurting local businesses and covering up the illegal fentanyl trade.
Small Package Waiver Waiver Helps Temu and Shein maintain budget prices on items they ship directly from China.
A few days later, the U.S. government suspended its exemptions in February, as customs officials worked hard to process and collect tariffs on a range of low-value packages.
Trade experts say many third-party sellers uninstall products assembled or assembled by Chinese manufacturers on their platforms, and are expected to add goods to the 90-day window.
"All companies will scramble to bring everything possible into the country," said Cameron Johnson, senior partner at Shanghai consulting firm Tidalwave Solutions. "Everyone is on the same boat."