Temu and Shein face massive tariffs. But don’t count them out of the U.S. e-tail scene, experts say

Temu and Shein’s business model in the United States has been disrupted by the closure of a trade loophole and high tariffs on China. However, experts believe that despite these challenges, the e-commerce companies will continue to be influential in American online retail.

The de minimis rule, which exempted U.S. imports worth $800 from trade tariffs, has officially closed for shipments from China, subjecting Temu and Shein to significant duties. Despite the loss of this exemption, the companies are expected to remain competitive in the U.S. market.

While the removal of the exemption has been welcomed by critics who accused Temu and Shein of undercutting local businesses, experts suggest that the companies are well-prepared to navigate the new trade landscape. They have implemented contingency plans and localization strategies to mitigate the impact of tariffs.

Temu has started offering goods shipped from local U.S. warehouses, while Shein is expanding its supply chain operations in other countries. Despite potential price increases due to tariffs, experts believe that Temu and Shein will maintain their competitiveness in the market.

The success of Temu and Shein in the U.S. is attributed to factors beyond the trade loophole, such as their agile supply chains and innovative marketing strategies. These companies have been able to offer competitive prices and attract consumers through various promotions and discounts.

Overall, experts predict that Temu and Shein will continue to thrive in the American e-commerce market, despite the challenges posed by trade tariffs and changing regulations.