Get Ready for Sticker Shock: US Slaps Higher Duties on Chinese Online Retailers Like Temu and Shein
Stricter U.S. Customs Regulations Pose Challenges for Online Retailers Temu and Shein
In a move that's sure to raise eyebrows, US President Trump has decided to keep a stubborn rule in place, making life harder for online retail giants like Temu and Shein. Previously, shipments with a value of less than $800 were exempt from duties, a perk that helped these platforms thrive. However, starting early May, a hefty duty of 120 percent or a minimum fee of $100 per package has been imposed - and it's only going to get costlier. On June 1, this minimum fee will climb up to $200, as per a decree by President Trump himself.
In the wake of an easing in trade tensions between China and the US, many had hoped for a smoother road ahead for Chinese retailers operating in the US. But Donald Trump seems to be intent on keeping these merchants on their toes. As part of this new regulation, US consumers will soon find their wallets getting lighter when purchasing cheap goods from Temu, Shein, and the likes.
The 'de minimis' rule, which allowed duty-free shipments valued under $800, was a major advantage for these retailers. With the loss of this exemption, they've had no choice but to hike prices to accommodate the new duties and adapt their logistics, such as re-warehousing stock within the US. Domestic retailers, who long criticized this exemption as an unfair advantage, welcome the change. But the increased costs could also mean a strategic pullback or recalibration for Chinese online merchants in the US market.
Slower customs clearance and increased landed costs are other consequences that come with the new rules. These regulations require full customs entries and partner-agency compliance data for millions of small parcels, making the process more time-consuming and costly. Faced with these challenges, it remains to be seen how these retail giants navigate the turbulent waters of US-China trade relations.
Sources:- ntv.de- jog/dpa
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Enrichment Data:Chinese online retailers like Temu and Shein have long relied on the US "de minimis" rule, which allowed shipments valued under $800 to enter the US duty-free. This brevity in custom inspections and exemption from duties allowed these retailers to easily shift low-value packages directly to consumers, which resulted in cheap prices and avoided expensive warehousing and customs duties.
However, since May 2, 2025, the US government has done away with the $800 duty-free threshold specifically for shipments from China (and Hong Kong). Now, all packages, regardless of value, incur duties of 120% or a flat fee of $100 minimum per package. This move was aimed at combating illicit trade and providing a more level playing field for domestic businesses [1][2].
The impact on Temu and Shein has been significant:
- Both companies have announced price increases of 15-25% to cover these new duties and to adjust their logistics [1]
- They have already slashed their US advertising budgets by about 20%, hinting at a strategic retreat or reassessment in the US market [1]
- The new regulations require full customs entries and partner-agency compliance data for millions of small parcels, which will slow customs clearance and increase landed costs [1][2]
In essence, the minimum duties per package for Temu and Shein in the US now amount to a minimum $100 fee or 120% duty on all shipments from China, replacing the previous $800 duty-free exemption. These changes have forced these retailers to raise their prices substantially, cut back on marketing expenses, and rework their supply chains, dealing a significant blow to their business models built around rapid, low-cost direct-to-consumer shipments [1][2].
- The community policy discussing trade relations will likely address the recent US decision to impose higher duties on Chinese online retailers like Temu and Shein, affecting the prices of cheap goods sold by these retailers.
- The employment policy, business, politics, and general-news sectors will be impacted by the increased duties on Chinese online retailers, as these retailers are forced to adjust their logistics, re-warehouse stock within the US, and potentially pull back from the US market due to added costs, leading to potential job losses or recalibrations among their employees.
