New data shows Shein and Temu suffer from U.S. demand drop after trade loophole closure

In recent news, fast-fashion giants Shein and Temu are experiencing a significant decline in U.S. demand following the closure of a crucial ‘de minimis’ trade loophole that previously enabled them to bypass hefty tariffs on imports. This legislative change has severely impacted their pricing structures, as these companies heavily relied on low import duties to offer competitive pricing in the U.S. market. With these cost advantages now diminished, Shein and Temu may find it challenging to attract budget-conscious American consumers, directly affecting their sales and market positioning. The closure of the ‘de minimis’ rule, which allowed for duty-free imports under a certain value, is part of ongoing efforts to level the playing field for domestic retailers. As a result, industry experts predict that Shein and Temu will need to reevaluate their business strategies to retain their customer base and maintain profitability in the U.S. The impact of these changes could extend beyond Shein and Temu, potentially signalling a broader shift in the fast-fashion industry.

CNBC