Prices increase at retailers like Shein, rapid-fashion Chinese brands due to tariffs
For millions of American consumers, especially those already grappling with inflation, the era of affordable clothing from China through retailers like Shein may be ending. The Trump administration's signal of more trade actions ahead, including a full de minimis ban by 2027, has set in motion a series of changes that are likely to affect the wallets of low-income consumers.
The tariff exemption known as "de minimis" ended for Shein shoppers in the U.S. on May 2, 2025. From then on, shipments of goods valued at $800 or less, including those from platforms like Shein, will no longer enter the U.S. duty-free. Instead, these shipments will be subject to applicable import duties and taxes based on either an ad valorem duty rate or a specific duty amount depending on the carrier’s election and the shipment's origin.
Reuters conducted a price analysis of nearly 200 Shein items between late April and late July. The results showed that the change has already started to take effect. By July 22, the average price for a group of low-cost items had risen 12.5% above their April levels. In more dramatic cases, the total cost of a group of 10 basic fashion staples at Shein increased from $31 to $69 - a 123% increase in under three months.
Amit Khandelwal, a Yale economist, states that the de minimis rollback is likely to raise prices for consumers, particularly for lower-income consumers. Brian Tu, Chief Revenue Officer at DCL Logistics, echoes this sentiment, stating that the tariffs will cause Shein's margins to shrink and prices to creep up. The de minimis rollback is estimated to cost U.S. consumers between $10.9 to $13 billion overall.
The most budget-friendly higher-end items at Shein showed the sharpest price spikes. Higher-end items at Shein also saw an average price increase of 23%. With tariffs in play, Shein and competitors like Temu now face more red tape, longer customs delays, and thinner margins.
The end of the "de minimis" exemption has resulted in prices rising over 100% for some low-cost items at Shein. This increase is likely to impact low-income Americans disproportionately, as they are more reliant on affordable imports for their clothing needs. The increased cost of apparel and other consumer goods may force these consumers to reconsider their shopping habits, potentially leading to a shift in shopping behavior.
Supply chain adjustments are also expected. Sellers and shippers will have to comply with new entry filing and duty payment requirements, which may also affect shipping costs and delivery times.
In summary, the removal of the de minimis exemption will impose duties on small shipments that were formerly exempt, increasing prices on many Shein imports and potentially disadvantaging low-income Americans who depend on such affordable cross-border ecommerce. The changes are already underway, and consumers can expect to see continued price increases in the coming months.
- The rollback of the de minimis exemption is anticipated to significantly increase prices for Shein's lowest-priced items, potentially impacting the purchasing power of low-income consumers within the finance and business sectors.
- As a result of the de minimis rollback, sheen and other affordable cross-border ecommerce platforms are likely to experience increased duties, red tape, longer customs delays, and thinner margins in the industry, affecting the availability and affordability of their products.
