Shein, Temu, AliExpress: End of duty-free low-cost goods from China in the US

As of May 2, 2025, US has terminated a customs loophole that allowed Chinese platforms like Shein, Temu and AliExpress to flood the American market with cheap products. This abrupt end to the ‘de minimis’ regime disrupted their business model and reshaped the landscape of global online commerce.

Us toughens its stance on Chinese imports

Since 4:01am GMT on May 2, all parcels shipped from China or Hong Kong to the US, regardless of their value, are now subject to particularly prohibitive customs duties. The end of the so-called ‘de minimis’ exemption, which exempted shipments under 800 dollars from tax, ended an exception that had allowed Chinese e-commerce giants to thrive in the American market.

Parcels conveyed by private carriers like UPS or FedEx are now subject to 145 percent customs duties. Those transported by postal services are subject to either 120 percent taxation or a fixed rate of 100 dollars, which will rise to 200 dollars from June 1. This measure is part of a general tightening of the trade war between Washington and Beijing, relaunched under the leadership of President Donald Trump, according to AFP.

A predictable weakening: initial effects from february

Although the measure only recently came into force, its announcement in February caused an immediate shockwave. According to data from Bloomberg Second Measure, relayed by Invezz, Shein's sales fell by between 16 percent and 41 percent in the five days following the announcement, while Temu saw theirs fall by up to 32 percent. This sharp decline is explained by American consumers anticipating higher prices, as they are sensitive to any increase in costs. The psychological effect of the measure was immediate: “the announcement alone was enough to curb purchases on these platforms, which were nevertheless growing strongly,” Invezz summarised.

A business model under pressure

The abolition of the customs exemption calls into question a model based on ultra-competitive prices made possible by the absence of taxation. On AliExpress, the effects are already visible: a simple purchase of 8.74 dollar earphones turns into a 21.41 dollar bill after the addition of 145 percent customs duties, as AFP noted. With more than 4 million parcels a day affected by this exemption, according to the White House, the impact is all the more massive as it affects a very large share of transpacific e-commerce.

Contrasting reactions: between logistical circumvention and strategic reorientation

Faced with this upheaval, Chinese platforms are reacting. Temu, owned by PDD Holdings, is now highlighting a ‘Local’ label on products already stocked in American warehouses. This positioning aims to reassure consumers: “This means you won’t have to pay customs fees,” the site states. This strategy relies on limited stocks, with no possibility of cheap restocking from China, which raises the question of its sustainability in the medium term.

For its part, Shein is trying to compensate for its loss of momentum in the American market with an offensive in Europe. According to Reuters, the platform increased its advertising spend in the UK and France by 35 percent in April. The aim: to reposition its core growth in markets where the regulatory environment remains, for the time being, more favourable.

But this strategy also carries risks. According to City A.M., the firm has suspended its plans for an initial public offering (IPO) in London, citing growing uncertainties surrounding international trade policies. Two communications agencies engaged to manage the IPO have also reportedly left the project. This decision, which came on the same day as the end of the ‘de minimis’ exemption in the US, underlines the difficulty for Shein to secure a strategic foothold outside China in a tense geopolitical context.

Consumers and smes caught in the crossfire

The disappearance of the ‘de minimis’ regime directly impacts American consumers, who are traditionally fond of cheap products. The price increases induced by the new taxes, estimated at between 20 and 50 percent according to estimates reported by Air Cargo News, reduce their purchasing power and fuel inflationary pressures that are already sensitive in distribution. Small and medium-sized enterprises (SMEs) using Chinese platforms to source or sell internationally are also likely to suffer. The proliferation of tariff barriers complicates their logistics and undermines their profitability.

Towards a geopolitical recomposition of global e-commerce

Beyond the Sino-American trade rivalry alone, this decision marks a redefinition of the rules of international trade in the digital sector. It underlines the strategic importance of logistics, stock localisation and commercial autonomy in a context of geopolitical tensions. “The customs duties are reaching such a level that it produces an embargo effect,” US Treasury Secretary Scott Bessent, quoted by AFP, has said on several occasions. While Washington suggests a desire for de-escalation, Beijing is for the time being content to “consider a proposal for negotiation”.

In the meantime, investors remain optimistic: on the New York Stock Exchange, shares in PDD (NASDAQ: PDD), Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD) rose by 4.34 percent, 3.77 percent and 4.12 percent respectively on the day the new rules came into force, betting on a rapid adaptation or a forthcoming détente, AFP noted.

A historic shift for digital commerce

With the end of the ‘de minimis’ exemption, the US is redrawing the contours of its digital commercial sovereignty. For the Chinese e-commerce giants, the time has come to reinvent themselves. For consumers, to adapt. And for states, to define a new global framework, between free trade and assumed protectionism.