Recent changes in US trade policy could lead to higher prices on items purchased from e-commerce sites like Shein, Temu, and Amazon Haul, the Washington Post reports.
Experts suggest that these price hikes could average around 30 percent, potentially adding significant costs to everyday purchases.
In a move aimed at boosting domestic production, former President Donald Trump revoked a long-standing tax exemption, known as the “de minimis” loophole, which allowed imports valued at less than $800 to bypass tariffs. This rule, originally passed by Congress in the 1930s, has historically saved companies billions of dollars on imports, especially those coming from China. According to government reports, 83 percent of total US e-commerce imports in fiscal year 2022 took advantage of this loophole.
The new tariffs, imposed as part of Trump’s executive order, also included duties on goods imported from China, Canada, and Mexico. These changes could significantly affect e-commerce platforms, especially those that rely on low-cost imports from China, such as Shein and Temu. As a result, the price of goods from these sites could rise substantially, potentially costing consumers an additional $22 billion annually, according to economist Gary Hufbauer.
The de minimis exception has long been beneficial to small- and medium-sized businesses by enabling them to reduce their import costs. For many of these companies, including small US-based sellers, the loophole allowed for lower prices on products, increasing their margins. However, the removal of the loophole now means that these businesses may face higher operating costs, which will likely be passed on to consumers.
The policy shift also has global ramifications. On Tuesday, the US Postal Service suspended inbound package shipments from China and Hong Kong, potentially causing delays and blocking parcels from retailers like Shein and Temu from entering the United States. Additionally, China has already retaliated by imposing its own tariffs on US goods, including 15 percent duties and restrictions on mineral exports.
For US consumers, particularly those who rely on inexpensive products from foreign e-commerce platforms, this change could be challenging. As Shein, Temu, and similar retailers account for a significant portion of daily shipments to the US, any increase in costs could affect budgets for shoppers seeking affordable fashion and home goods.
However, there are some winners in this situation. US companies that were unable to take advantage of the de minimis exemption in the past, such as fast-fashion retailers and department stores, may benefit as the competitive advantage held by foreign e-commerce sites diminishes. These American retailers, who previously lost customers to cheaper foreign alternatives, could see a boost in business as prices rise for shoppers seeking lower-cost options.
