US e-commerce giants Shein and Temu will not be severely impacted by changes to the de minimis exemption for customs duty, experts say. The executive order signed by former President Donald Trump on Saturday effectively closes a loophole that allowed these companies to ship goods from China without paying duties.
Shein and Temu have prepared for potential disruptions by increasing local fulfillment in the US. In 2022, Shein started fulfilling orders from its US warehouse in Indiana, and this year it opened an office in Washington state. Temu also allows vendors with US warehouses to sell on its marketplace, creating “local” orders that don’t require border crossings.
E-commerce experts say the success of these companies relies on low prices and trendy items, not de minimis shipments. Shein’s unique manufacturing model, which involves partnering directly with manufacturers to create small batches of in-demand items, is also a key factor in its success.
While customers may see higher prices and longer shipping times due to the new regulations, experts say it won’t be the end for either company. “This will certainly have an impact, but it’s much smaller than people think,” says Alex Yancher, CEO of Passport. The changes may add friction and cost to the process, but it’s unlikely to disrupt the companies’ core capabilities.
The US Customs and Border Protection has seen a significant increase in de minimis shipments over the past few years, with over 1.36 billion shipments in fiscal year 2024 alone. However, experts say the speed at which the change was implemented may have caught some off guard. The global trade situation continues to evolve quickly, with other changes on the horizon, such as tariffs on goods from Canada and Mexico going ahead despite a recent pause.
Source: https://www.businessinsider.com/shein-temu-wont-be-killed-by-de-minimis-exemption-changes-2025-2