The American tax vulnerability that made Shein and Temu Rich change. What will happen to brands now?

For years, Shein and Temu used an American tax vulnerability to maintain low costs and send the elements to the country quickly.

Not anymore.

US President Donald Trump signed an executive order on April 2 to end the minimum exemption – a base that allows small packages worth less than $ 800 to enter American taxes – to firmness from China and Hong Kong, on Friday.

The DE Minimis base is found to prevent customs agents from spending a lot of time in treating small packages that do not get much money for the government in import taxes. But now, the Trump administration reflects the ruling of imports from China, saying that the exemption allowed illegal drugs to enter the country.

Companies such as Shein and TEMU, both of which were established in China, used the base in their favor, shipping orders to the United States as individual packages instead of bringing the shipping boxes full of elements, storing them in warehouses and distributing them to consumers from there, as most retailers do.

This exemption is a large part, which helped keep the prices of Shein and TEMU very low, according to Samuel Rosko, a lecturer in the supply and operations chain at the College of Business Administration at the University of Colombia.

“I expect them to take great success, but he is still trying to compete in the United States,” said Rosko.

But despite the increase in prices, the factors of the supply chain and the slowing packets on the border will be possible obstacles, experts say visits will not completely come out, nor the fast fashion model they accelerate.

Prices are already valid

As of Friday, the small packages of less than $ 800 in the United States that enter the United States from China will be subject to duties 120 percent, or a fixed price of $ 100. The flat rate is scheduled to rise to $ 200 as of June 1.

Assuming that the company has passed most or all this duty towards consumers, the cost of the elements on Shein and TeMu may be more than the weak Americans.

Both Shin and Timo are already Declare Prices are increasing due to the definitions, which came into effect last week. and Analysis by Bloomberg I found that the products on the Shein site, which faces the United States, increased by up to 377 percent in some cases, by eight percent on average for women’s clothes.

TEMU also added “import fees” to the elements on its location by about 145 percent, According to CNBC. His analysis shows that the American Sundress worth $ 18.47 will now cost 44.68 dollars after import fees, for example.

Rosko says that the Canadians are unlikely to see any price increases today, given that there are no changes in import rules or duties between our country and China. (There is a similar exemption for De in Canada for beams of less than $ 20, $ 40, or $ 150, depending on where the package is charged.)

At the time of writing this report, the prices on the Canadian Xin and Timo sites seemed not changed.

Despite the increasing charges in the United States, Rosko says this does not get the Chinese e -commerce sites out of the game.

“Even if its prices have increased by a half and a half, it is still competitive with retail stores in North America,” said Rosko.

It gives an example of a bikini of $ 10 on one of the platforms that may cost $ 22 or so after the definitions enter. Pikinists from H&M, Zara and AbercRombie are still much more expensive, at a rate of $ 50, $ 80 and $ 120, respectively, which means that shein and TeMu still have room for implementation in the American market.

Low -income Americans are likely to be more than others who lose it from increasing prices, according to Lu Lu, assistant professor in fashion and clothing studies at Dilayer University. He says that the basics such as shirts and socks may see the largest leaps of prices because they are likely to buy shoppers from dusty food even if they become more expensive.

In the past, the competition with Shin and Timo has kept the prices for other fast -fashioned retailers, according to Lu. Now that the Chinese e -commerce giants raised their prices, he says if he might allow other brands to raise them also without fear of losing customers.

Supply chain issues are also a worker

The tariff and disappearance of the minimum vulnerability also constitute a set of TEMU and Shein supply chain problems, according to Roscoe and Lu.

While neighboring countries such as Vietnam and Cambodia face a much lower tariff than China, he says if transferring production to these other countries is not very simple.

For one, these types of transformations take a lot of time and money. Lu says it is unlikely that companies are committed to switching as their products are making any time soon, given how Trump’s tariff policy was back and forth until now.

Chinese factories can also make a variety of products, and in small batches. Companies like Shein designs a product and makes a few hundred hundreds of hundreds in the beginning to see how much they sell them before making more. It says if Chinese factories accommodate this practice, while factories in other places usually have a quantity of not less than 3000 or 4000 for requests.

“They rely on factories in China based on the highly integrated and integrated local supply chain to make such products, (so) is not easy to remove production outside China.”

It says if the new rule is likely to hinder the speed of the products in the country. The minimum base of these small packages of less than $ 800 allowed to avoid treatment, according to border agents when they arrive from China. But getting rid of the base means that they will undergo all checks.

He says that about a million small packages come to the United States every day under the minimum at the present time, so that the added treatment affects the speed of people getting the beams that consumers expect to receive within days.

In order to compensate for the potential loss of business, Rosko says TEMU and Shein are likely to pay to other markets that do not have a high tariff – such as Canada, for example.

“We are likely to see a lot of targeted ads for Canadians,” said Rosko.

I say if this type of expansion will help, but he adds that no seller can realistically stand up to the United States market.

“We have no other market that can be large and profitable,” said Lu.

Sustainability victory? Think again

With high fashion costs as a result of the definitions, some reports indicated that this may push consumers towards the re -sale market or buy less in general – which makes it a victory for sustainability.

I said if his students in Gen Z (part of the main demographic of companies like Shein) said that the price increases for cheap clothes would lead them to buy less or shopping used in an attempt to avoid definitions.

Annika Kozlovsky, an auxiliary professor in design studies at Wisconsin Madeyson University, who is looking for sustainable costumes, says added import taxes may actually exacerbate the current sustainability issues faced by Sheen and Timo. She says companies that use companies that use cheaper inputs, which tend to be less sustainable, to try to maintain low costs.

She says that the cost of clothing repairs may rise because parts like buttons or zipper, which tend to import, will also become more expensive-a possible blow to the used clothing market as well. If there is more demand and economic pressure in used stores, also, Kozlowski says that sellers may raise prices as a result, which makes this sustainable option less appreciated for shoppers.

As a whole, Kozlowski says that the definitions will not disrupt the fast fashion because it does not address the root cause-our desire for superior things.

“We are still getting a culture of consumption,” said Cozlovsky. “This addiction does not break.”

She says any real solutions should start there – as well as Rosko.

Rosko says that Shin and Timo came with the shipment of the fast fashion model in which companies such as Zara began in the late 1990s. While the fast fashion clothes that took months to move from a concept to a real product, Shein in particular can revolve around a new element in Less than 25 daysMake the dressing manufacturer faster than it was in the past.

Rosko says that slowing this pace will require efforts such as government legislation against farce and exploitative operations, as well as boycotting consumers to brands that participate in these practices.