So if you haven't heard (or seen) Shein and Temu are getting expensive. Thats right. The massive e-commerce retail companies, which are known for being cheap, are getting expensive. And if you have TikTok, you already know people aren't too happy with this news. However, what you might not know is that these prices aren't rising due to tariffs, but rather something else.

Here’s the thing. Cheap stuff is generally imported without any sort of duties. And that's because of the de minimis exemption. It's de minimis btw not de MINIMUS, just clarifying because for months I was calling it de minimus like it was that Disney cartoon horse. Anyway, here’s the textbook definition: De minimis exemptions refer to thresholds below which imported goods are exempt from duties and/or taxes. If you understood that then good for you. But if you didn't then I’ll sum it up: If a good is cheap af, it is imported without any extra charge like duties or tariffs. 

The real question is how cheap is cheap-enough-to-be-duty-free? It differs. For the US, it's $800 and for the UK it's £135. Basically, anything that is imported into the US is duty-free as long as it is under $800. And something from Shein and Temu being over $800 is unlikely.

Well, that's changing now. President Trump signed an Executive Order on April 2nd eliminating duty-free de minimis treatment for low-value imports from China starting May 2nd, 2025. Why? Well, it was to combat the influx of illicit goods entering the US and to get rid of the “big loophole” that benefitted Shein and Temu. The real question now is how much tariffs Shein, Temu, and similar others would be subject to?

It depends on how they ship their items. Typically there are two types of shipping networks: the International Postal Network and private air cargo and commercial couriers. International Postal Service is basically stuff like USPS (USA), China Post (China), India Post (India), Royal Mail (UK) etc, which is basically government-run mail system. On the other hand, you have commercial services like FedEx and DHL.

Now here’s how much tariffs goods would be subject to depending on the way they’re shipped.

TL;DR? If an item is shipped using commercial services (FedEx, DHL) then it is subject to the 54% tariff that was imposed on China on May 14th along with any other applicable duties. And if it is shipped using international postal network then it is subject to a duty rate of either 30% of its value or $25 per item ($50 per item from June 1 onwards). 

So its effect on Shein and Temu would depend on how they ship their stuff so let's look at it.

1. Shein

Shein typically uses the international postal network. Orders are shipped from China using China Post and then handed to USPS for delivery to customers. So it would face the 30% or $50 per item duty. What determines where it would face 30% of its value or $50 per item? That depends on how pricey the item is. If it is valued at say $120 then 30% of it is $36 which is less than $50 so it would be subject to the $50 flat fee. But if it is valued at $200 then 30% of it is $60 which is more than $50 so it would be subject to a $60 fee.

Shein also has what's called express shipping service which, if you use Shein you already know, means faster delivery. In the US, typically takes anywhere within 7-15 business days but with express shipping, it would take just about 3-7 business days. And this express shipping uses commercial services for delivery so it would be subject to the 54% tariff.

It also has regional warehouses in the US in order to fulfill orders locally whenever possible but the majority of items still need to be shipped since the warehouses only serve to high demand items

2. Temu

Temu primarily uses commercial services. USPS is used but for domestic purposes. Meaning if they have the item in their US-based warehouse it would be delivered using USPS. If it needs to be shipped from China, it will use commercial services.

Either way, they’re facing some sort of duty. And they despise it as much as their customers do. Because obviously, the last thing they want is to lose customers. So it's safe to say that they’re scrambling to look for other options. Shein is trying to diversify its market to other countries to reduce dependency on the US. Other than that it is also shifting production to Ho Chi Minh, Vietnam which doesn't face the low-value shipment duties yet. And then of course it is trying to absorb the cost. Temu, on the other hand, completely ceased shipments from China and is relying on its US-based warehouses to fulfill deliveries. Both e-commerce giants are moving towards bulk shipping to restock warehouses in the US instead of individual air shipments.

So yeah, if you live in the US it's better if you just go to your local thrift store because they are cheap and nice (no this isn't sarcasm).

Thank you for taking some time off to read the 867 words so far and go thrifting!