Activists have long criticized Shein for environmental and labor issues, but recent policy changes by President Trump may severely disrupt its business model. Shein and Temu thrived during the pandemic thanks to a loophole allowing duty-free shipment of goods under $800, which led to no import taxes paid. Now, the imposition of a 10% tariff and the removal of the de minimis exemption complicates their pricing strategy. This indicates a significant shift in the competitive landscape for fast-fashion brands, with uncertainty around the future costs of imported goods from China.
This week, that competitive advantage vanished, as Trump imposed a 10% tariff on all goods imported from China and also ended the de minimis tax exemption.
This was their basic advantage. [Shein and Temu] built their entire business model on de minimis.
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