The new trade era with China has arrived and, while the White House celebrated it as a success, millions of Americans felt like they were hit with a bucket of cold water. The reason? Shein and Temu will continue paying 120% tariffs… even after the new agreements.
That’s right, although most Chinese imports to the U.S. will see a tariff reduction of 30% over the next 90 days, shipments from these two platforms we love so much will remain punished with the highest rates… Why? According to the White House, it’s necessary to reduce the competitiveness of Shein and Temu against local giants like Amazon and Walmart… Here’s everything that’s happening:
Tariffs are reduced… but not for everyone
For those of us addicted to fast (and cheap) shopping, this news hasn’t been well received. After a series of meetings in Geneva between Treasury Secretary (Scott Bessent) and U.S. Trade Representative (Jamison Greere) with Chinese officials, they agreed to reduce tariffs on most Chinese products for three months.
However, the announcement came with fine print: shipments from Shein and Temu were explicitly excluded from this temporary relief.
Shein and Temu: punished
As if it were kindergarten, Shein and Temu will have to continue paying the tariffs set a few months ago (120%). The White House’s reason is nothing more than to protect U.S. retail, which sees these platforms as true predators due to their ultra-cheap prices. The idea is for consumers to feel discouraged because the prices are no longer that cheap, and to migrate to other platforms (American ones, of course).
Of course, they’re not going to sit still. Temu, in fact, is already redirecting its strategy toward Europe, after noticing that its profit margin in the U.S. has been drastically reduced by these tariffs.
The end of the “cheap shopping trick”
At the beginning of May, the Trump administration eliminated the so-called “de minimis loophole,” a legal loophole that allowed platforms like Shein and Temu to avoid tariffs on packages under $800. That’s the reason why we could shop so cheaply, because they weren’t paying taxes. But with this new rule, prices have shot up and it’s no longer so appealing to buy on those websites.
Why is China’s dominance so feared?
Chinese apps (Temu, Aliexpress and Shein) have dominated the younger consumer. For the United States, they’re like the three horsemen of the apocalypse, but for the rest of the world, getting new clothes practically every month has become their favourite hobby: being able to make a $50 purchase and receive countless pieces of clothing or items at home (although some, let’s be honest, aren’t exactly what we expected).
But of course, by keeping these tariffs just for these platforms, they’re sending a clear message: it’s not worth buying from them, as it would be, for example, to buy from Walmart, Target, or Amazon, which are free from extra taxes.
The future for consumers
Anyone who wants to keep shopping on these platforms has to be aware that prices will remain sky-high and much more expensive than local retail companies, because they’ll be inflated by these tariffs. And although the platforms will try to absorb the cost… it’ll be very difficult because they’ll have to reduce their profit margin to the minimum (and it’s not very big for this kind of store…).
Will there be more changes in the coming months?
It’s possible. Although the agreement is initially valid for 90 days, negotiations between the U.S. and China continue, and the tariffs could change if both parties reach additional commitments. For now, Shein and Temu will remain on the trade blacklist. Let’s hope they come back soon, there are lots of avocado toiletry bags we need to buy!