Shein Sales Plummet in US After Tariff Exemption Ends

Shein Group Ltd. has experienced a significant downturn in its U.S. sales following the Trump administration's termination of a crucial tariff exemption for small shipments, a policy that had previously fueled the fast-growing retailer's expansion.

The policy, known as "de minimis," officially ended on August 29. In the subsequent month of September, Shein's observed sales in the U.S. reportedly dropped approximately 8% compared to the same period last year, according to Bloomberg Second Measure data tracking anonymous U.S. shopper transactions. This marked its second-worst monthly performance in the past three years.

The de minimis rule previously allowed shipments valued at no more than $800 to enter the U.S. duty-free. The Trump administration cited the need to "level the playing field" for American businesses as a primary reason for ending this policy. Shein, a closely held company founded in mainland China and now headquartered in Singapore, had rapidly expanded in recent years, largely due to its strategy of undercutting competitors on price with goods predominantly manufactured in Asia. The company's quarterly sales neared $10 billion in the first quarter of this year, Bloomberg reported in July.

The cessation of the de minimis policy is expected to benefit Shein’s fast-fashion rivals, such as H&M and Zara, according to Poonam Goyal, a senior analyst covering retail e-commerce at Bloomberg Intelligence. Goyal stated, "The playing field has been levelled," adding that this means Shein's "prices aren't as competitive as they were in the past." Shein did not provide a comment for this story.

The White House initiated its move against the de minimis exemption in early May, specifically removing it for shipments originating from China. Ahead of this initial change, Shein had already begun raising its prices, some quite dramatically, as reported by Bloomberg at the time. This earlier adjustment also impacted the company's U.S. business, with monthly sales declining almost 11% then, according to Second Measure.

In response to these shifting trade dynamics, Shein has reportedly slowed its pursuit of an initial public offering (IPO) and has also been actively diversifying its supply chain, aiming to reduce its significant reliance on China.

The impact of these changes is already being felt by consumers. Natasha Kuliecza, a sophomore at Rutgers University and a regular Shein customer, mentioned exploring alternatives like Amazon and Target due to noticeable price increases and extended delivery times from Shein. "As a college student, I’m trying to save money with everything," Kuliecza explained. "So when I want more clothes, I’d rather just go the cheaper route."