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Fast fashion giant Shein and online retailer Temu have issued warnings to American customers as fresh trade tensions between the United States and China threaten to drive up prices. Both companies announced that they will increase product prices from April 25, in response to the latest wave of tariffs introduced by former President Donald Trump.
Under the new measures, a 145% tariff has been imposed on all Chinese imports, prompting swift retaliation from Beijing, which slapped 125% taxes on US goods. In a bid to protect consumers, there’s a temporary 90-day pause on tariffs for other countries, though a blanket 10% US tariff will still apply.
In messages sent to customers this week, Shein and Temu encouraged shoppers to make purchases before the upcoming price adjustments. “Due to recent changes in global trade rules and tariffs, our operating expenses have increased. To continue offering quality products, we will be making price adjustments starting April 25,” the companies said.
End of a Major Tax Loophole
Adding further strain, the United States is set to close the so-called “de minimis” tax loophole on May 2, which has long allowed imports under $800 to enter the country duty-free. When this rule changes, cheaper goods will face a 30% tax or a $25 fee per item, whichever is higher — with this charge rising to $50 per item from June 1.
Both Shein and Temu have heavily relied on this loophole to maintain low-cost operations in the US market, shipping millions of packages directly from China. The companies assured customers that they are working to soften the blow, saying: “We stand ready to make sure your orders arrive smoothly during this time. Our teams are working hard to improve your shopping experience while keeping prices as low as possible.”
Advertising Cuts and Global Impact
Recent data from Sensor Tower reveals that Temu has slashed its US advertising spending by 31% across platforms like Meta, X, and YouTube in the two weeks leading up to April 13. Shein also reduced its digital advertising by 19% across major social platforms during the same period.
In the UK, concerns are rising about a possible flood of Chinese products into European markets as a consequence of US tariffs. British retailers fear a “dumping” of excess stock onto platforms like Amazon Marketplace, Shein, Temu, Alibaba, and TikTok Shop.
Currys CEO Alex Baldock voiced these concerns in an interview with the Financial Times, warning that the UK may soon become the primary destination for redirected Chinese stock. Echoing this, Helen Dickinson, Chief Executive of the British Retail Consortium, called on the UK government to review its de minimis rules to protect domestic retailers and consumers.
The situation remains tense, with businesses, governments, and shoppers closely monitoring how these trade changes unfold. Both Shein and Temu are expected to continue adjusting their pricing strategies while seeking ways to navigate the turbulent trade environment.
Meanwhile, global markets brace for potential price hikes, supply chain disruptions, and broader economic consequences as the US-China trade conflict escalates further.
