Shein reportedly mulling US business restructuring to mitigate tariff impact

Chinese fast fashion giant Shein is believed to be looking into ways to restructure its US business as uncertainty around tariffs on foreign imports continues to heighten.

According to the Financial Times (FT), which cited two people with knowledge of the company’s deliberations, one idea being considered is to divert production for the US market to countries outside of China.

Notably, next to China, Shein also has manufacturing capabilities in locations like Brazil and Turkey. However, such operations are unlikely to reach the required scale, the media outlet noted, and thus could cause a significant reduction in supply to the US.

Additional sources for FT stated that no decisions on any US restructuring have been made at board level. Shein has also previously stated that it had no plans to shift its supply chain capacity out of China.

The news comes as Shein braces for impact on the closure of the de minimis rule–a tax exemption for cheap imports–this week, which will result in US tariffs of 120 percent for the clothing company.

Such impact could put the company’s already delayed London IPO, initially set to launch in the first half of the year, at a crossroads.

An unnamed executive told the media outlet: “Internally we are all focused on figuring out how to deal with the tariff situation at the moment. Before we have clarity on that, no one can even start to think about the IPO.”

FashionUnited has contacted Shein with a request to comment.