China-based e-commerce sites Shein and Temu will get a chance to stock their U.S. warehouses due to the reprieve in tariffs announced this week, experts say, allowing them to keep fulfilling orders — for now, anyway.
The U.S. and China agreed Monday to cut tariffs for 90 days between the two countries from 145% to 30%, and the White House also announced that tariffs on small packages would be cut from 120% to 54%.
Those small shipments worth less than $800 previously didn’t pay tax or duties at all under what was known as the de minimis loophole. That loophole allowed companies like Shein and Temu to ship clothes, accessories and even gadgets directly from China to U.S. shoppers for ridiculously low prices.
When Trump’s tariffs were first announced, it seemed like that was all coming to an end. The de minimis loophole was closed on May 2. Earlier this month, Temu announced it would stop directly shipping from China to U.S. customers.
Shein and Temu have become hugely popular with American consumers. In 2022, Shein was valued at $100 billion, and as of January 2024, Temu had more than 50 million monthly U.S. active users.
With this week’s news, the future looks brighter for e-commerce companies and their customers, at least temporarily. Shein and Temu didn’t respond to HuffPost’s requests for comment, but experts told news outlets that the lower tariffs will give the companies a chance to stock U.S. warehouses with bulk shipments and avoid abruptly shutting down operations in the country.
Jason Wong, who has been associated with Temu’s product logistics and operations in Hong Kong, told NBC News that though it will still be more expensive for Temu to sell its products in the U.S., the lower tariffs will keep inventory flowing.
“Thirty percent is still high, but compared to 125%, 30% is basically nothing,” Wong told NBC News.
He added he didn’t believe direct shipments would be coming back unless the tariffs were lowered even further.
Yao Jin, associate professor of supply chain management at Miami University of Ohio, told Reuters that Temu and Shein will use the next 90 days to stock up U.S. warehouses before another possible tariff increase.
“This is great for Shein and Temu, if nothing else, to replenish their U.S. inventory,” he said.