US President Trump's elimination of the duty-free loophole significantly impacts Temu and Shein, as tariffs on imports from China sharply increase costs for consumers. The number of low-value shipments entering the US has increased dramatically, and now these retailers will face 30% tariffs along with substantial import fees. To adapt, Temu and Shein may pivot to Europe, utilizing its de minimis loophole. Despite scrutiny on EU exemptions, growth in low-value shipments from China remains strong, outpacing European firms burdened by competition and compliance costs. Proposed EU changes are not expected until at least 2027, prolonging current effects.
In 2024, 1.36 billion shipments entered the US under the de minimis rule, marking a nine-fold increase from 153 million in 2015.
Temu and Shein will likely double down on Europe, exploiting the EU's de minimis loophole to sustain their low-cost model.
In 2024, 4.6 billion low-value parcels flooded the EU market, with 91% coming from China, doubling from the previous year.
The proposed scrapping of the EU de minimis exemption, still awaiting approval, is not expected to take effect until 2027 at the earliest.
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