Tariffs Drive Up Prices for U.S. Shoppers on Temu, Shein

Off the Cover News: By: Jonathan Bradford

For millions of Americans, shopping on e-commerce sites like Temu and Shein has become a daily habit.

Both platforms offer ultra-low prices on everything from clothing to electronics, largely by cutting out the middlemen and sourcing directly from manufacturers in China. But recent U.S. tariffs are shaking that business model, pushing prices higher and forcing consumers to reconsider their purchases.

Temu and Shein have exploded in popularity in the United States by offering cheap, trendy products and quick shipping. Though Shein is based in Singapore and Temu was founded in Boston, both companies operate heavily from China and use direct-to-consumer models to drive sales.

“Shein sells fast fashion for cheap, and you can buy a lot at once without spending much,” said Brittey Smith, a mother of two teenage daughters. “My girls buy press-on nails, bracelets and clothes for around $100. It feels like a bargain.”

That bargain came to an end on May 2, new tariffs took effect on Chinese imports, including apparel, electronics, automobiles, and more. Depending on the product, the tariffs range from 10% to as high as 125%.

As a result, consumers are starting to see higher prices — and are spending less. According to eMarketer, Shein’s U.S. sales dropped 23% during the week of April 25 to May 1 compared to the previous week. Temu’s sales fell 17% during the same period.

According to The Economic Times, a Temu sun dress went from $18.47 to $44.68 with import charges. Also, a 14-in-1 power strip from Temu price increased from $19.34 to $48.32 after adding import charges. At Shein, a ten-piece kitchen towel set was priced $1.28 and went to $6.10 after import charges, which consumers saw an increase of over 30% on all home and kitchen products and toys.

Temu and Shein have long relied on a U.S. trade exemption known as the de minimis rule, which allows shipments valued at $800 or less to enter the country duty-free. According to the U.S. House of Representatives, about 30% of all de minimis packages come from Shein and Temu.

“This loophole gave foreign companies a huge advantage, but not anymore” said Chaz Switzer, a regular Shein customer. “Tariffs are just an excuse for American businesses to raise prices. But I get it — it’s about leveling the playing field.”

Originally, the de minimis exemption was expanded to improve the flow of small packages and help fight the opioid drug crisis by letting authorities inspect higher-risk shipments more effectively.

U.S. Customs and Border Protection (CBP) processes more than 4 million de minimis packages each day. In a fiscal year 2024, CBP seized over 21,000 pounds of fentanyl, enough to kill 4 billion people, according to the White House.

Despite these concerns, as of May 2 2025, President Trump abolished the Under Section 321, where Americans cannot receive one tax-free shipment per day valued at $800 or less. However, pressure is mounting in Congress to change the rule, especially as trade tensions with China escalate.

For shoppers like Jillian Switzer, the rising costs are making her rethink online purchases.

“I buy from Shein because it’s cheap,” she said. “But if the prices double, I’ll stop. I usually order three or four things to find one that actually fits. Now that I think about it, I probably overpaid for that one item.”

According to the Wall Street Journal, Peter Pern, Head of U.S. strategic communications for Shein, said the company uses advanced shopping data to stay ahead of trends and reduce waste.

“Shein uses Shein X designers and monitors how users interact with the site to understand their shopping behavior,” Pern said. “Traditional retail might order $10,000 to $100,000 worth of garments months in advance. Shein uses an on-demand model, producing in smaller batches and adjusting quickly.”

When a customer is browsing items and by clicking over the item or adding it to their cart, Shein takes note of it; then it creates new designs based on popular items. The retailer then can test how well the item or product is with customers and if it does well, they will produce more.

Temu, owned by Chinese e-commerce giant Pinduoduo, follows a similar playbook. While Shein’s main focus is on fashion, Temu sells a broader range of items — clothing, home goods, beauty products and electronics, all at low prices.

Both companies source many of their products from China’s Yiwu International Trade Market, a massive marketplace spanning more than 1,500 acres with over 75,000 stores.

Under the Trump Administration, an executive order was installed to eliminate the de minimis policy, though some limits were placed to prevent abuse by large-scale sellers.

If tariffs remain in place or increase, American businesses could see an immediate benefit, but consumers may suffer by paying higher prices.

“The only thing affected here is greed,” said Chaz Switzer. “People hear about tariffs and assume prices are rising, even if they haven’t yet. That psychology alone changes shopping behavior.”

Others argue that tariffs are essential to protecting domestic jobs and industries.

“If China couldn’t sell to the U.S., it would cripple their economy they would go belly up,” Switzer added. “Right now, they’re dumping cheap goods into the U.S., which is slowing down American production. If this keeps up, U.S. companies will close and jobs will vanish.

The National Retail Federation, one of Washington’s most powerful trade groups, has lobbied aggressively against rising tariffs. The group argues that while tariffs may target foreign producers, the costs are passed down to American consumers and retailers.

To stay competitive, Shein and Temu are diversifying their supply chains and exploring new manufacturing hubs outside of China. They are also shifting some of their advertising that spends away from the United States and toward European markets.

“We’re seeing both companies look for new opportunities abroad as the U.S. market becomes more difficult,” said a retail analyst who asked not to be named. “It’s not just tariffs — it’s consumer fatigue, quality complaints, and pressure from lawmakers.”

Still, platforms like Shein and Temu have proven resilience. Their use of data, fast shipping, and low prices continue to attract shoppers looking for value, even if that value now comes at a higher price.