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U.S. shoppers accustomed to bargain-priced orders from popular fast-fashion platforms Shein and Temu should prepare for price increases as a longstanding trade loophole officially closes on August 29, 2025.
On July 30, 2025, President Donald Trump signed Executive Order 14324, ending the “de minimis” duty-free exemption that previously allowed imported packages valued at $800 or less to enter the country without tariffs. Beginning at 12:01 a.m. EDT on August 29, all international packages—regardless of value—will be subject to applicable duties.
For years, Shein and Temu have built their business models around this exemption, shipping millions of low-value parcels directly from overseas warehouses to U.S. consumers. According to Reuters, more than 30% of all daily de minimis shipments to the U.S. originated from the two platforms alone.
Industry Impact
Both Shein and Temu announced in April that prices would rise in anticipation of shifting trade policy. Starting April 25, the companies began making gradual adjustments and encouraging customers to “shop at today’s rates” ahead of additional increases.
Experts warn that this is not a minor shift. “For companies built almost entirely on the de minimis rule, closing the loophole will be devastating,” said John Zhang, marketing professor at the Wharton School of Business.
What Consumers Can Expect
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Higher Prices: Shoppers will see increases on clothing, accessories, electronics, and home goods that were once heavily discounted.
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Shipping Shifts: Temu has already begun moving inventory into U.S. warehouses to reduce costs, signaling potential changes in delivery speed and logistics.
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Retail Shake-Up: Analysts suggest traditional U.S. retailers like Amazon and Walmart may regain competitive ground as Shein and Temu lose their duty-free advantage.
While supporters of the executive order, including Sen. Jim Banks (R-IN), have praised the move as a step toward protecting U.S. markets, others argue the change will disproportionately affect low-income consumers who have relied on low-cost imports for everyday goods.
Background
The de minimis exemption, rooted in the Tariff Act of 1930, was designed to simplify trade by waiving duties on low-value goods. Between 2018 and 2023, Chinese exports using this channel surged from $5.3 billion to $66 billion, underscoring its importance to e-commerce platforms.
Earlier this year, shipments from China and Hong Kong lost access to the exemption, with the August 29 deadline now extending the policy change to all global imports.
