fShein and Temu shoppers can breathe a little relief after President Donald Trump revokes the strictest policies on Chinese imports, and today’s new rules are in effect today.
Trump announced a broad trade deal on Monday after meeting with Beijing on Monday that reduced import duties on all Chinese goods from 145% to 30%. China, in turn, lowered its tariffs on U.S. imports from 125% to 10%. The reduction will continue over the next 90 days, while the world's two largest economies have negotiated a long-term deal.
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Trump also signed an executive order to temporarily reduce tariffs on direct-to-consumer packages originating from China and Hong Kong, effectively dropping back one of his most influential moves in the trade war.
Packages worth less than $800 have been able to pass for a long time de minimis The exemption allows e-commerce giants like Shein and Temu to flood the U.S. market with cheap Chinese goods. Earlier this year, Trump proposed to close the rule, imposing a 30% tariff on low-value imports from China and Hong Kong in early April. (Reuters reported last year that the de minimis example has been exploited to deadly consequences by fentanyl traffickers.) In tit-for-tat tariff hikes, the low-value parcel tariff rate for China was raised to 120%, while setting an alternative per-package flat-rate of $100 option to the value-based tariff for low-value imports from China shipped via the US Postal Service, to be raised to $200 in June.
But on May 12, Trump reversed the curriculum by reducing the value-based tariff rate for low-value imports from China to 54%, effective May 14. Additionally, according to the order for that order, the flat rate option per package will remain at $100, but will no longer increase to $200 in June.
Delivery experts told Reuters that the tariff rules also apply to different carriers: a 54% interest rate will only affect shipping through USPS, while commercial operators such as DHL, FedEx or UPS will also face the default 30% interest rate. In fact, this means that most imports from China will face a 30% tariff rate, while goods worth more than $333 but less than $800 will face an effective tariff rate as low as 12.5% by shipping through USPS and paying flat rate tariffs.
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A few days before the end of the De Minimis waiver on May 2, U.S. customers began publishing screenshots of certain online store receipts, including Temu, which showed about 145% of the “import charges”, totaling more than the cost of the product itself. (Amazon also considers showing tariff costs on its products, but backed down after complaints from the Trump administration.)
One user posted on Reddit: "From billionaires shopping like billionaires to shopping like farmers." (Research by economists at UCLA and Yale University shows that low-income postal codes actually report much more spending on imports from de Minimis imported from China compared to China.
Shein and Temu sold significantly in the week after Trump's tariffs on China took effect. According to an analysis by Bloomberg, the average price of Shein’s top 100 beauty and health products has more than doubled from April 15 to May 6. Temu suspended goods from China and moved to sell inventory, selling inventory from US warehouses imported from China before the tariffs. The company said it will turn to local merchants in the U.S. market for selling goods. It is unclear whether TEMU will adjust its model based on new trade rules.
Still, shoppers may see their wallets hurt a little more than before the tariffs came into effect, as previous rules from De Minimis meant that fast fashion sites like Shein and Temu could offer super low prices by completely bypassing duties and other customs statements, thus allowing millions of dollars of cheap packages to enter the U.S. every day. Moreover, the latest executive order lowers value-based tariffs for low-value imports from China only within 90 days to keep businesses and consumers going on in uncertainty about what may happen next.