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President Donald Trump’s looming tariffs already seem to be undermining the U.S. expansions of e-commerce giants Shein and Temu, as both companies reportedly experienced significant daily-sales drops recently.
In the first week of February, as Trump’s new tariffs were poised to take effect, Shein’s daily sales plummeted by as much as 41% compared to the same day the prior week. Meanwhile, Temu’s daily sales fell by as much as 32% during the same period, according to data from Bloomberg’s Second Measure.
Trump’s delay in removing the de minimis exemption has allowed shipments under $800 to continue to enter the U.S. tariff-free, providing a crucial advantage for companies like Shein and Temu. This exemption allows them to ship small, low-cost items directly to U.S. consumers while avoiding the tariff costs that would otherwise drive up prices.
However, recent shifts, like the U.S. Postal Service (USPS) lifting its temporary freeze on package acceptance from China and Hong Kong, could influence the flow of goods, potentially reshaping how these companies adjust to the evolving tariff environment.
If the exemption is removed, both retailers will face higher import taxes, raising costs and making it harder to compete with Amazon.
Neither Shein nor Temu immediately responded to Quartz’s requests for comment on the matter.
Though the tariffs are framed as promoting consumer safety and fair trade, they could ultimately benefit Amazon, which already boasts a robust infrastructure for faster delivery. Though Amazon isn’t immune to rising costs, its domestic operations and larger scale give it a competitive edge over its rivals in China, enabling it to absorb these costs.
Amazon’s latest move, launching a budget store called Haul, may put additional pressure on Shein and Temu.
Both Shein and Temu have been scrambling to adapt to the impending end of the de minimis exemption. To maintain their U.S. customer base, they’ve ramped up efforts to navigate the new tariffs and customs regulations.
Temu has focused more on stocking items in U.S. warehouses, bypassing tariffs on direct shipments from China. Shein has made similar moves, opening distribution centers in states like California and New Jersey to streamline operations and cut reliance on international shipping.
Shifting to local inventory speeds up delivery — a key advantage in the competitive e-commerce race — but it also limits product availability. That could keep the door open for Amazon, still the dominant player in the space. In 2024, Amazon delivered over nine billion items via same-day or next-day delivery.
For Shein, the timing of the looming tariffs could be disastrous, coming at a critical juncture for its delayed U.S. IPO. Tariff-related price hikes could undermine its appeal and threaten the very low-cost model that has fueled its growth.