End of an Era: How U.S. Shoppers Are Bracing for Higher Prices on Chinese Goods

The era of affordable Chinese mail-order goods is drawing to a close for American consumers. Online retail giants Shein and Temu have announced plans to raise prices starting April 25th. In nearly identical notifications sent to customers this week, both companies encouraged prompt purchases at current prices. The rapid growth of these digital platforms was largely due to the “de minimis” rule, which allowed the duty-free shipping of low-cost goods to the U.S. However, this loophole is set to close in early May following an executive order signed by Donald Trump. This change means increased expenses for American buyers and challenges for the plethora of Chinese firms supplying Shein and Temu.

Casey Hall, a reporter for Reuters, provided insights into the impact on these companies through a visit to Guangzhou in southern China. She explored several of the “Shein villages,” hubs for thousands of suppliers to the fast-fashion retailer. The atmosphere there appeared somber, as many suppliers reported a significant drop in orders, with some facing reductions by as much as half this year. Beyond scrapping the de minimis provision, the Trump administration has imposed tariffs on Chinese imports at a staggering 145%. While Shein could theoretically bypass these tariffs by relocating more production to Vietnam, which currently benefits from lower U.S. duties, the company denied such strategies in a statement to Reuters. Even if production shifts do occur, they may not offer an immediate solution, given that Shein’s success is not solely tied to low production costs but also its ability to swiftly adapt to consumer preferences.

A key aspect of Shein’s triumph is its impressive Chinese supply chain. The company claims to work with 7,000 suppliers in China, many of which are small, agile factories capable of producing thousands of styles each week in small batches that can be rapidly increased if a particular style gains popularity. Relocating the supply chain to Vietnam, though, presents challenges. Vietnam’s infrastructure is not as developed or efficient as China’s, potentially leading to longer and more costly production times—a significant issue in an industry driven by speed and cost-effectiveness. Currently, dresses on Shein’s site are priced between $6 and $91, with Temu offering even lower prices. The looming question is how much of a price hike American consumers will bear.