Temu, Shein escape tax blow: Temporarily calm or storm?

(Dan Tri) - After the Trump administration unexpectedly eased tariffs on Chinese goods, Temu and Shein immediately accelerated shipping to rescue the supply chain. Is this an opportunity or just temporary?

President Trump recently decided to reduce tariffs on most imported goods from China to 30%, a significant reduction from the previous "sky-high" tariffs. This is considered part of a plan to restart negotiations for a new trade agreement.

However, the "joy was short-lived" as the punitive tariffs remained in place for small, low-value packages shipped directly from China to American consumers - the core business model of Temu and Shein.

Both platforms had previously benefited from a “de minimis” loophole that allowed packages under $800 to be exempt from import duties. However, President Trump has aggressively closed this “door” since May 2, imposing tariffs of up to 120% or a flat fee of $100 per package (expected to increase to $200 in June).

Although the White House later softened its stance, announcing a reduction in the tariff rate to 54% late Monday (May 12), the fixed fee of $100 per case remains a huge burden.

Temu's smart move and "breathing space" for Shein

In a seemingly deadlocked situation, Temu showed remarkable acumen. Before that, the company had quietly built a large-scale warehouse system in the US.

This strategic move allows a large volume of goods to be shipped domestically, both faster and to avoid exorbitant import surcharges. A few weeks ago, Temu tweaked its website and app to prioritize products shipped from its US warehouses, and announced plans to attract more US-based sellers.

The surprise reduction in US import tariffs for large shipments (down to 30%) has opened a “golden window of opportunity” for both Temu and Shein. “30% is still a high tariff, but compared to 125%, it’s almost nothing,” Jason Wong, who works in Temu’s product logistics department in Hong Kong, said enthusiastically. He predicted that the volume of bulk shipments from China to the US would increase sharply in the coming months to replenish stocks.

Previously, according to Mr. Wong, Temu had to temporarily suspend direct shipping from China after the “de minimis” duty-free policy was tightened, shifting to relying entirely on inventory in the US. Now, with the new policy, restarting large shipments to fill warehouses is inevitable.

Cheap packages from China are subject to high tariffs (Photo: Reuters).

Shein, which also has warehouses in the US, appears to be taking full advantage of this opportunity. While it has not announced a complete halt to direct shipping from China and has only noted that “the tax is already included in the price of the product,” the reduction in tariffs will certainly make it easier for the company to balance its costs and maintain its price competitiveness.

Supply chain experts say both Shein and Temu will increase shipments from China to replenish inventories and fulfill pending orders.

“In the short term, Shein and Temu will definitely increase their shipments to the US,” said Anand Kumar, associate director of research at Coresight Research. He also sees this as an opportunity for the two companies to reassess their long-term strategies, especially as Shein has taken steps to expand its supply chain to countries such as Türkiye, Mexico and Brazil.

Sellers breathe a sigh of relief, the market waits anxiously

The news of tariff relaxation is like a breath of fresh air to the seller community on these platforms.

Sun Yang, the owner of a business selling drawing tools on Temu, could not hide his joy: "Our whole office cheered when we read the news."

Sales from U.S. warehouses account for all of his profits, he said, and the news came at a time when inventory was running low. Sun has seen double-digit sales growth over the past two months as U.S. consumers stocked up on supplies amid fears of rising prices.

"Returning to 30% means we will no longer be under pressure from price increases in the near future. I hope consumers will regain confidence and continue to shop," Sun said.

But the game is still full of unknowns. The 54% tariff and a flat $100 fee for each small package shipped directly from China remain a major barrier. Jason Wong of Temu expects further tariff relaxations for this form of business.

Temu and Shein’s U.S. competitors, including third-party sellers on Amazon that distribute products from China, are also expected to take advantage of the 90-day window to speed up their shipments. “Everybody is trying to get their products into the U.S. as quickly as possible,” said Cameron Johnson, a senior partner at Shanghai-based consultancy Tidalwave Solution.

The US tariff relief, albeit temporary for 90 days, has provided a significant lifeline for Temu and Shein. The ability to restock US warehouses at lower tariffs allows them to maintain their price and product variety advantages, at least in the short term. US consumers, who have become accustomed to low prices from these platforms, will likely continue to benefit.

But the future remains clouded with uncertainty. Will a comprehensive trade deal be signed? Will the “de minimis” policy be further relaxed or is this just a temporary “trick” before tougher measures are imposed? Temu and Shein may have escaped for now, but the battle for market share and dealing with trade barriers is still ahead. At least for now, they have an extra “life” to continue playing.

Source: https://dantri.com.vn/kinh-doanh/temu-shein-thoat-hiem-sau-don-thue-tam-yen-hay-bao-20250514101706761.htm