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There is some bad news for folks who like $2 t-shirts and jeans that fall apart after three uses: President Trump is ending the “de minimis” trade exemption that enabled Temu and SHEIN to ship goods to the United States without paying any import duties.
President Trump already cancelled the exemption once before, only to reinstate it because U.S. Customs and Border Protection officers were overwhelmed by the flood of new packages they would have to inspect. But an executive order signed on Tuesday officially ends the exemption on May 2.
Under the new rules, goods that have previously qualified for the exemption will be subject to a duty of either 30% of their value or $25 per item, whichever is higher. On June 1, the duty will increase to $50.
Temu and SHEIN will either need to raise prices or send more goods in bulk to be stored in U.S. warehouses, which is something the latter has already been working on, with distribution centers opening in several states. Temu for its part has been adding US-based sellers to its marketplace and steering customers there. Which is to say, the onslaught of garbage, disposable goods containing toxic chemicals and produced on slave labor wages likely will not end with this executive order.
Temu and SHEIN can be thought of best as H&M or Forever 21 on steroids. The discount e-commerce websites produce cheap goods, like t-shirts and flip flops, in China and ship them directly to customers, instead of storing them in warehouses in the United States. Promoting through platforms like TikTok, these websites have ballooned in size by quickly identify new fashion trends and enabling teenagers and young adults to try out them out on a limited budget.
Besides sidestepping shipping duties, China has also negotiated very low international shipping fees with couriers including the United States Postal Service, which means shipping from China to the United States is often cheaper than shipping domestically, between states. Critics say this has created an unfair playing field for Chinese ultra-budget websites.
According to eMarketer, Temu alone will sell $30 billion worth of products in the U.S. in 2025. Companies including Amazon and TikTok are attempting to compete with their own marketplaces for cheap goods. The cancellation of de minimis may not necessarily help them, depending on where the goods originate.
President Trump’s new aggressive tariffs have been criticized across the political spectrum as a tax on individuals and businesses. They are particularly regressive, since lower income consumers have less wiggle room to accommodate higher costs of goods. It is hard to argue that Temu and SHEIN are good services, however. They are selling cheap garbage that does not last. Either you pay $2 for a shirt that has to be replaced after two weeks, or you pay $10 for a shirt that will at least last a few months or longer.
