U.S. tariff crackdown hits Chinese fast fashion giants

Chinese fast fashion giants Shein and Temu are facing declining sales in the U.S. following Donald Trump’s renewed tariff measures targeting Chinese imports. Sales have dropped 16 percent and 41 percent respectively since Trump’s inauguration, driven by the elimination of the “de minimis” trade rule, which previously exempted goods under 800 dollars from duties, Bloomberg said. The new policy, which imposes tariffs on a wide range of Chinese goods, including clothing and electronics, has disrupted their business model, leading to increased costs and logistical delays.

Customs operations, particularly at key entry points like New York’s JFK Airport, have struggled to keep up with the surge in packages now requiring inspection. Experts warn that the rapid policy shift has overwhelmed infrastructure, with daily package volumes reaching four million in 2024. Temporary relief has been introduced while the U.S. Department of Commerce works to improve customs capacity. However, when fully enforced, the new regulations will increase shipping times and consumer costs, potentially pushing shoppers toward faster, more reliable alternatives such as Amazon and its new budget platform, Amazon Haul.

The regulatory crackdown in the U.S. mirrors growing scrutiny in Europe, where the European Commission is moving to close similar tax loopholes. In 2024, 91 percent of parcels valued under 150 euros entering the EU came from China, doubling in volume compared to the previous year. Brussels has announced plans to tighten customs laws, potentially posing further challenges for Shein and Temu. Both companies are now focusing on compliance and working with European governments to secure their market positions, but the new regulatory environment underscores the end of a freewheeling era for cross-border e-commerce.