NEW YORK/LONDON, Feb 4 (Reuters) - Analysts and industry experts anticipate that prices for Shein, Temu, and Amazon Haul products are set to increase for American consumers. This follows U.S. President Donald Trump's decision to close a trade loophole used for duty-free shipping of low-value packages from China.
Retailers like Shein and online store Temu, known for offering various products from toys to smartphones, have gained popularity in the U.S. partly due to the "de minimis" exemption that allowed them to maintain competitive prices.
A U.S. congressional committee revealed that Temu and Shein accounted for over 30% of daily shipments to the United States under the de minimis provision.
Trump's action includes a 10% tariff on China and 25% tariffs on Canada and Mexico, with a regulatory pause. The committee reported that nearly half of the packages under de minimis originate from China.
Juozas Kaziukenas, CEO of e-commerce data firm Marketplace Pulse, noted, For companies like Temu and Shein, this is a significant development as de minimis was a key factor in offering low prices and fast product delivery.
Regarding the impact on margins, Aaron Rubin, CEO of warehouse management software firm ShipHero, highlighted the substantial effect this change will have on e-commerce businesses.
Amazon Haul, a recent initiative offering low-cost items from China, might feel the repercussions, according to analyst Arun Sundaram, although it forms a small part of Amazon's overall e-commerce operations.
Discussing competitive dynamics, analyst Gil Luria from D.A. Davidson mentioned that removing de minimis could enable Amazon to compete more effectively with Shein and Temu on quality, price, and shipping.
While both Temu and Shein are implementing strategies to mitigate the effects, such as sourcing from outside China and establishing U.S. warehouses, the increase in prices due to the elimination of de minimis may impact the products they sell in the U.S.
Sheng Lu, a professor at the University of Delaware specializing in fashion and apparel studies, suggested that the rise in prices resulting from the cancellation of de minimis could be felt more acutely by small and medium-sized online retailers reliant on sourcing from China.