Are Shein and Temu Prices Going Up? What to Know as Trump Ends De Minimis Tariff Loophole

As of Friday, a loophole that allowed American shoppers to purchase inexpensive goods from mainland China and Hong Kong without paying tariffs or filling out customs forms will be closed. This change has already resulted in price increases for many imported goods from retailers like Shein and Temu, potentially leading to a decrease in orders as consumers face higher costs and added inconveniences. President Trump’s administration has undergone changes regarding this loophole, initially ordering its closure in February but then reinstating it shortly after. This back-and-forth decision caused a backlog of packages at the borders, according to logistics experts.

The loophole, known as the de minimis exemption, allowed items worth $800 or less to enter the United States without tariffs or paperwork since 2016. President Trump is eliminating this exemption for goods from mainland China and Hong Kong, the primary sources of de minimis shipments. Customs and Border Protection processed over one billion de minimis packages in a year, with an average shipment value of $54 in 2023.

The exemption for shipments under $800 was initially implemented by Congress to avoid the expense and hassle of processing them for customs revenue. President Trump is ending this exemption, in part, to curb the influx of fentanyl and its precursor substances into the U.S. through de minimis shipments. The volume of de minimis shipments surged after the imposition of tariffs on China during Trump’s first term, indicating a shift towards smaller packages to evade tariffs.

With the elimination of the exemption, prices for de minimis goods from China are already rising significantly, impacting shoppers who previously enjoyed affordable purchases. Companies like Temu have begun disclosing the additional costs of tariffs on their products, leading to higher checkout totals for consumers.

Shoppers have noticed price increases on platforms like Shein even before the tariff exemption officially ends. For example, a shopper in Atlanta saw prices for summer dresses on Shein escalate within a short period, anticipating further price hikes. The imposition of tariffs is already affecting the cost of goods on e-commerce sites, prompting shoppers to act quickly before prices soar.

Amazon considered detailing import charges on its competitive platform, Amazon Haul, but ultimately decided against it. The impact of the loophole closure is evident across various online retailers, with prices adjusting to reflect the new tariff policy.

The changes in tariff policies will also affect the paperwork required for imports. De minimis shipments from China will be classified as “informal entry” imports, allowing for simpler processing without the need for a recipient’s Social Security number. However, carriers may still request this information to expedite customs clearance.

Carriers like FedEx and DHL have outlined their approaches to handling shipments without the de minimis exemption, emphasizing compliance with Customs and Border Protection requirements. The increased scrutiny on incoming packages may pose challenges for carriers and customs authorities, potentially leading to delays in processing.

The closure of the de minimis loophole will impact the collection of tariffs and inspection of a higher volume of packages, presenting logistical challenges for carriers and customs agencies. The precise effects of these changes on package delivery times remain uncertain, with potential delays depending on the efficiency of tariff collection and customs clearance processes.

This article was contributed by Ana Swanson and Madeleine Ngo.