In anticipation of sweeping tariff changes targeting low-cost imports from China, online retail giants Temu and SHEIN are aggressively raising prices, upending their long-standing value-driven business models.
SHEIN, the fast-fashion powerhouse, quietly implemented significant price increases between April 24 and 26, reportedly in direct response to forthcoming U.S. tariff reforms. According to a Bloomberg pricing audit, the company hiked prices by an average of 10% across a basket of products. However, certain categories surged dramatically: beauty and health items saw average increases of 51%, with one anti-cracking lip balm leaping from $1.07 to $3—a 180% spike overnight. Home and kitchen products jumped by an average of 30%, while toys and women’s apparel rose approximately 30% and 8%, respectively.
Though SHEIN has yet to publicly comment, internal sources confirmed the pricing moves were made in light of new tariff structures. These changes eliminate the long-relied-upon “de minimis” exemption, a provision that had allowed shipments under $800 to enter the U.S. without duty fees. Both SHEIN and rival Temu have leveraged this loophole to avoid tariffs and deliver ultra-low-cost goods directly to American consumers.
That model is now under strain. The de minimis exemption, effectively nullified under a revised trade framework from the Trump administration, will officially end on May 2. The policy shift coincides with a broader tariff hike—raising duties to 120% on a broad range of Chinese imports.
Temu, another popular Chinese discounter, has also begun passing costs along to consumers. Reports indicate the platform recently started adding import charges—some as high as 145%—to select orders. In one case cited by CNBC, a dress priced at $18.47 came with an additional $26.21 in import fees, nearly tripling the final cost to $44.68. A bathing suit originally priced at $12.44 soared to $31.12 after import charges were factored in.
On its website, Temu clarified: “Items imported into the U.S. may be subject to import charges. These charges cover all customs-related processes and costs, including import fees paid to customs authorities on your behalf.” The company acknowledged the fees may not directly reflect the actual duties paid to border officials.
In a defensive pivot, Temu has been rapidly building a network of U.S.-based warehouses and urging customers to select products from “local” sellers in a bid to sidestep the worst of the new regulations. Items shipped domestically are reportedly exempt from the added import fees.
Both companies issued warnings to their customers in mid-April, encouraging them to make purchases before the tariff hikes took effect. The recent changes confirm that the warnings were not merely precautionary. In one pricing study, 30 out of 43 SHEIN items analyzed by Bloomberg saw price hikes of 10% or more in just a 48-hour window.
As Washington tightens enforcement and revises trade loopholes, the era of ultra-cheap Chinese e-commerce imports appears to be drawing to a close. For consumers, that could mean fewer bargains. For Temu and SHEIN, the challenge now lies in adapting to a business landscape where cost-cutting alone may no longer ensure competitiveness.
Read more via Bloomberg/ Business Times