After a chaotic week of tariff changes, the US government has ended the de-minimis rule, which allowed low-cost goods from China and Hong Kong to enter duty-free. This change has raised concerns among fast fashion retailers like Shein and Temu, as prices are expected to rise significantly. The de-minimis rule has been blamed for creating an unfair competitive landscape, with bipartisan support for its termination evident in recent years. Legislation aiming to strengthen domestic supply chains through this rule's end may shift consumer behavior as they explore alternatives to fast fashion.
Alon Rotem, the chief strategy officer for ThredUp, welcomed the executive order, noting that the rise in fast fashion creates an unfair competitive advantage.
Ending the de-minimis rule has been a target of bipartisan legislators in recent years, as the value of goods entering the US under this rule soared from about $5.5bn in 2018 to $66bn in 2023.
The changes in tariff policies may prompt consumers to look for alternatives, significantly impacting fast fashion retailers dependent on low-cost imports.
Some brands have anticipated this change, indicating the shift might not be surprising for companies but could catch consumers off guard.
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