Online merchants are notably affected by President Donald Trump’s tariffs and the management of the de minimis exemption.
According to Reuters, Shein, a fast fashion online retailer located in Singapore, has seen price hikes. For instance, a “baby bodysuit” increased by 63 percent from April 24 to July 22. In the same timeframe, a kid’s t-shirt rose by 68 percent, boy’s shorts by 57 percent, a boy’s t-shirt by 45 percent, a girl’s tank-top by 52 percent, a baby shirt by 24 percent, a girl’s camisole by 35 percent, and a girl’s dress by 10 percent, among various other price increases.
“Reuters monitored the prices of 70 of the most affordable apparel items available on Shein’s U.S. website for girls, boys, men, and babies on April 24, just before Shein’s price modifications took effect to comply with new tariff regulations beginning May 2, which subjected these packages to substantial tariffs of up to 145 percent,” reported Reuters.
These price increases are likely attributed to the removal of the de minimis exemption, as per Reuters.
On May 2, Trump abolished the de minimis exemption, meaning that packages valued under $800 arriving in the U.S. from China are no longer exempt from taxes. Trump claims that sellers exploit the exemption to transport illegal substances like fentanyl in low-value shipments. While legislators from both parties concur that reforming the de minimis rule might inhibit drug trafficking in the U.S. and benefit U.S. manufacturers, some question its effectiveness in reducing illegal drugs and supporting U.S. manufacturing, and are wary about the timing amidst his ongoing trade conflict.
As highlighted by Reuters in a working paper released by the National Bureau of Economic Research last year, the removal of the exemption “will cost U.S. consumers between $10.9 billion and $13 billion in total, but the relative cost per individual will be greater for lower-income Americans.”
These tariffs and the termination of the de minimis exemption do not solely impact Shein, although it is one of the largest online retailers affected. Influencers, content creators, and entrepreneurs, especially those selling their own products and collaborating with brands reliant on the de minimis exemption, are also experiencing the repercussions.