Starting August 29, 2025, shoppers on popular online retail platforms Shein and Temu will likely face higher prices, a consequence of a significant change in U.S. trade policy set in motion by a recent executive order signed by President Trump. This order ends the so-called de minimis trade loophole, a tariff exemption that allowed goods valued at $800 or less to enter the United States duty-free. The implications are broad, impacting millions of consumers and reshaping the e-commerce landscape.
For years, the de minimis exemption has been a critical factor enabling low-cost, direct-to-consumer imports to flood the U.S. market, especially from China. This threshold, which has been $800 since 2016, allowed goods below this value to bypass tariffs and complicated customs procedures, effectively making it cheaper and faster to ship small individual packages. Retail giants like Shein and Temu leveraged this loophole heavily, shipping affordable apparel and goods straight from China to American doorsteps with minimal additional fees. Data show that such low-value Chinese exports to the U.S. soared from $5.3 billion in 2018 to $66 billion in 2023, underscoring how central this exemption was to fueling growth in cross-border e-commerce.
The new executive order, which takes effect August 29, 2025, revokes this duty-free status for all packages valued at $800 or less coming into the country outside the international postal network. As a result, these goods will now face all applicable customs duties and more thorough inspections. The implications for Shein and Temu are significant: over 30% of packages benefiting from the former exemption come specifically from these two companies. Their costs for shipping and importing products will increase sharply, with typical duty fees estimated between $80 to $250 or more per shipment, depending on tariff rates and the nature of the goods.
To adapt, both Shein and Temu have already indicated they will raise prices on their platforms, though the full extent of these hikes has yet to be disclosed. Some price increases observed on the platforms in recent months are directly related to adjusting for shifting trade policies. These price rises will affect millions of American consumers who have grown accustomed to affordable fast fashion and goods from these sites.
The end of the de minimis exemption may also reduce product variety and availability in the short term. Retailers and carriers are already reported to be rerouting or canceling some imports from China to the U.S., leading to longer delivery times. Temu, for example, has reportedly minimized shipments directly from China, focusing instead on inventory already housed in U.S. warehouses.
Beyond the impact on prices and shipping logistics, this policy shift is framed as a move to protect American businesses and workers from the flood of inexpensive and often underpriced goods. Supporters argue that for too long, duty-free imports, mostly from China, have undercut domestic retailers who pay higher costs to comply with tariffs and import regulations. Legislators like Senator Jim Banks of Indiana have praised the executive order as a step toward leveling the playing field.
However, the change also poses challenges to consumers, particularly those with lower incomes who rely on low-cost goods from these online platforms. Some experts warn that prices could increase by 1.5 times, or in some cases $100 or more, depending on the shipping and import duty burden. While the immediate tax burden technically falls upon the carriers responsible for clearing customs, it is nearly certain that these costs will be passed down to shoppers.
The end of the de minimis loophole is likely to have a ripple effect across the broader e-commerce ecosystem, prompting some companies to rethink supply chains and manufacturing strategies. Some retailers are accelerating nearshoring initiatives to countries like Vietnam and India or pursuing domestic production to avoid tariffs. At the same time, logistics companies and technology providers focused on supply chain optimization are expected to grow in importance during this transition.
For the average online shopper, the day-to-day impact starting at the end of August is clear: affordable international packages, especially from sites like Shein and Temu, will come with a noticeably higher price tag, fewer shipment options, and potentially longer wait times. This shift marks the end of an era that for more than a decade facilitated easy and cheap access to global goods but also exposed vulnerabilities in trade enforcement and domestic market competition.
In essence, this change highlights how evolving trade policies can swiftly affect consumer markets and online retail behavior, fundamentally altering where and how Americans shop for affordable goods from abroad.Â
