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The days of bargain shopping on low-cost e-commerce platforms such as Shein are apparently over. It started with the disappearance of a loophole that has allowed Shein to pump affordable products into the U.S. market without paying any cross-border shipment duties, and has now transformed into a full-blown punishment for any product shipped from a warehouse in China or Hong Kong.
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If you’ve been a fan of Shein hauls, the new policies are going to hurt at different magnitudes, depending on the cart value. Let’s say your package is worth under $800. So far, products valued at less than $800 have enjoyed a de minimis status, which means they didn’t incur any fee before entering the U.S. market. That policy is no longer in place. First, the shipment fee was raised to 30% for shipments, or $25 per package. In the past 24 hours, as China has refused to pull its retaliatory tariffs on the U.S., the fee has been hiked even further following a revision of the executive order.
Not only has U.S. President Donald Trump increased the tariffs on China even further, but he also raised the fee on Chinese-origin shipments from 90% to 120%. That essentially means if your final cart value is less than $800, you will have to pay an additional fee worth 1.2x of the final bill before the package arrives at your doorstep. The White House has also hiked the “per postal item” fee from $75 to $100, applicable until June 1, 2025. After that deadline, the import dues will be raised to $200 per postal item.
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Higher prices, smaller catalog
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Transportation carriers can pick between whatever route they intend to take to pay the shipment fee, but the added cost of entry into the U.S. market is inevitable. The de minimis exemption’s end was brutal enough, but that’s not the end of it. The changes are going to hit the low-income households disproportionately. As per market think tank Cato Institute, (48%) of the small-value shipments entering the poorest zip codes originate from China, deriving the de minimis benefit.
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The impact of these added duties is going to unfold in a variety of ways for Shein shoppers, aside from products getting pricier. As per an economist’s estimate shared by The Wall Street Journal, the hurt on Shein’s business model is going to drive up the average U.S. shopper’s annual cost by $136 per month. According to an analysis by Financial Times, the shipment times are also going to go up, and the added paperwork will likely spiral into an administrative nightmare, as well.
Shein predominantly succeeded by its low-cost goods, and if customers are asked to pay a hefty fee, they would rather look at local outlets to avoid the shipment dues. Moreover, sellers will also see fewer incentives to do business in the U.S. market, and as a result, the product portfolio diversity is going to shrink on Shein. The platform was hoping to skirt around the rules by supplying wares from U.S.-based inventories, but the Chinese government has reportedly asked Shein to avoid implementing any such plans. In a nutshell, there is little scope left for Shein, and that only means a degraded shopping experience for customers in the U.S. market.
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Christeen Lanz
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