Get ready for potential price jumps! Fast fashion giants Temu and Shein are bracing for impact as new tariffs set to kick in on May 2nd will likely send their operating costs soaring. The companies have already started warning American shoppers that product prices will likely start to creep up from April 25th, all thanks to the increased expenses stemming from these new trade policies.

Remember those days of snagging super affordable deals from Temu and Shein? Well, things might be changing. President Trump’s revamped trade strategy is targeting China with some hefty tariffs—potentially up to a whopping 145% on imports. Plus, they’re doing away with the “de minimis” rule, which used to let products worth $800 or less skip customs duties. This little exception was a game-changer for Temu and Shein, allowing them to ship directly to you and keep prices low with less red tape.

Shein and Temu pivot from U.S.  markets

Now that perk is gone. These companies are looking at new import fees: either 30% of the item’s cost or a flat $25, which could climb to $150 per item come June! Trump’s latest move is a response to previous actions from China and has pushed these upper limits to a record-breaking 245%.

Shein has even put out a customer notice acknowledging they’re “adjusting prices to reflect increased operating expenses.” They’re also trying to reassure us they’ll “do everything to minimize the impact.” Temu hasn’t officially released numbers, but insiders in their logistics teams are reporting a noticeable dip in Americans’ appetite for orders.

“Because of recent shifts in global trade rules and tariffs, our operating costs are on the rise. But don’t worry, prices stay the same until April 25th, so get your shopping in at today’s prices while you can!”

~ Shein

With competition heating up at home, both Shein and Temu are reportedly tightening their belts on advertising. Data from Sensor Tower indicates Temu slashed its daily ad spending across platforms like Facebook, TikTok, and YouTube by a significant 31% between March 31st and April 13th.

Shein also trimmed its ad budget by 19% during the same period, and it’s starting to show, impacting their visibility on platforms like Pinterest and Instagram. According to Mark Ballard, a digital marketing director at Tinuiti, Temu even began scaling back its Google Shopping ads around April 12th.

Looking Beyond the U.S.: Retailers Eye Europe and Australia to Dodge Trump Tariffs

Rumor has it these companies are considering spreading their wings, anticipating a slowdown in U.S. sales. Jason Wong, a logistics coordinator at Temu in Hong Kong, mentioned that the company plans to fully expand into Europe and Australia.

Australia, with its generous “de minimis” threshold of under $1,000, is particularly appealing to these fast-fashion brands now targeted by U.S. tariffs. Wong also shared that their internal forecasts predict a “significant drop” in sales volume from the American market in the coming months.

“We’re pretty certain we’ll see a big decrease in demand from the US and North America.”

~ Wong

This policy shift is creating ripples beyond just fast fashion, prompting strategy changes in over 70 countries that trade with the U.S. and China.

Trump’s renewed focus on trade discussions was also evident during a recent meeting with Ryosei Akazawa, Japan’s top trade advisor. While these talks used to mainly center around trade and investment, Trump broadened the scope to include sharing the costs of American military defense.

Tariffs imposed by the Trump administration have been on a steep climb since early April. It started with a 20% tariff on Chinese goods, but quickly escalated to 34%, 50%, and then 125% in response to retaliatory tariffs from China.

The White House has clarified that these layered penalties now add up to a hefty 245% on Chinese imports. The administration states that this action is aimed at China due to what they see as ongoing disrespect towards American trade policy.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot

Source: cryptopolitan.com