Published by Global Banking and Finance Review
Posted on February 6, 2025
4 min readLast updated: January 26, 2026
Trump's de minimis cancellation impacts Shein and Temu, with Shein facing greater challenges due to its reliance on air freight. Temu adapts with local warehousing.
By Casey Hall
SHANGHAI (Reuters) - The Trump administration move to stop low-cost imports entering the U.S. tariff-free is likely to hit fast fashion retailer Shein harder than online dollar-store Temu, thanks to Temu's wider product range and moves to change its shipping strategy.
Both sites grew exponentially in the U.S. in recent years helped by the so-called de minimis rule, a measure that exempted shipments worth less than $800 from import duties. A June 2023 report estimated the Chinese retailers accounted for more than 30% of all packages shipped to U.S. each day under the rule.
The rule began to come under scrutiny during the Biden administration prompting both firms to start making preparations to rely less on it, but Temu made changes to its model faster, analysts and sellers told Reuters. Temu is owned by PDD Holdings while Shein is aiming to list in London in the first half of the year.
Tech analyst Rui Ma said Temu "rapidly expanded its semi-managed model" as part of its groundwork, an Amazon-like strategy that sees goods shipped in bulk to overseas warehouses instead of directly to customers.
Within months of first bidding to attract sellers keeping inventory in U.S. warehouses last March, about 20% of Temu’s U.S. sales were shipped from local sellers rather than directly from China, according to estimates from e-commerce market research firm Marketplace Pulse.
Two China-based Temu sellers told Reuters that by the end of last year, half the products they sold to the U.S. were sent to warehouses there first.
Temu has also been increasing the proportion of goods it sends by sea. Basile Ricard, operations director at Ceva Logistics Greater China, said an increase in Temu ocean-freighting more goods in bulk - and larger-sized, more valuable goods, such as furniture - was apparent in the "second half" of last year, reducing importing under the de minimis threshold.
In contrast, Shein remains more reliant on air freight to directly ship the thousands of styles of ultra-fast fashion items it pumps out each week, Ricard said, although it has opened centres in states including Illinois and California, as well as a supply chain hub in Seattle.
"I think it’s important to separate Shein from the rest of the e-commerce players because their business is based on speed of supplying new styles and they have to remain very reactive to trends, so speed is a bigger part of their business," he said.
The vast majority of Shein's products are still made in China, but it has also started to diversify its supply chain, adding suppliers in Brazil and Turkey, for example, a move that might also accelerate in the wake of new tariffs and regulations.
Temu and Shein did not respond to requests for comment.
Trump's executive order this week plunged the express shipping industry into confusion with the U.S. Postal Service on Wednesday reversing a decision not to accept parcels from China and Hong Kong it had announced just 12 hours before.
Nomura analysts estimate that the volume of de minimis shipments to the U.S. could plummet by 60%, as American shoppers ordering from Shein, Temu and Amazon Haul face higher prices.
About 1.36 billion shipments entered the United States using the de minimis provision in 2024, 36% more than in 2023, according to CBP data.
Ma, however, said that she expected Shein and Temu to be able to adapt quickly, given the agility of China's e-commerce firms and their supply chains.
"I think there will be real impact, especially in the short term, but it is not catastrophic," Ma said. "China has the most competitive e-commerce operators and the most advanced supply chain. Short of a total ban or something crazy like that, I think they will be able to figure it out."
(Reporting by Casey Hall; Editing by Kate Mayberry)
The article discusses the impact of Trump's de minimis cancellation on Chinese e-commerce giants Shein and Temu.
Shein faces greater challenges due to its reliance on air freight for fast fashion, making it more vulnerable to import duties.
Temu is increasing sea freight and using local warehousing to reduce reliance on the de minimis rule.
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