Shein, a prominent online fashion retailer, reported a significant $99 million quarterly loss attributed to the elimination of a small package import duty exemption by former US President Donald Trump. This exemption, known as the “de minimis” tax rule, allowed duty-free entry of imports valued under $800 into the US until it was terminated last year. Consequently, all commercial shipments are now subject to standard customs duties and tariffs, impacting companies like Shein that previously leveraged the “de minimis” rules to sell low-value items from China.
Shein noted that the removal of the US de minimis exemption since May 2025 adversely affected sales in the US and overall revenue growth. However, signs of consumer purchasing normalization and sales trends improvement have been observed in the US recently.
In contrast to a profit of $395 million the previous year, Shein recorded a loss this quarter, with sales increasing marginally to $9.05 billion. The company attributed part of its loss to a $328 million impact from an accounting adjustment related to special investor shares.
In a similar vein, the UK allows overseas retailers to ship small parcels valued under £135 without import duties until a planned amendment to end this practice by October 2028. Additionally, the EU recently imposed a temporary €3 customs duty per item on low-value goods up to €150, effective until July 2028, after which regular customs duties will be applicable.
Shein expressed concerns that the EU’s removal of the small parcel exemption could significantly impact its business operations. The company anticipates potential trends in the EU following a similar pattern to the US post the removal of the de minimis exemption.
To offset the adverse effects of increased duties and taxes, Shein is contemplating raising prices in the US and Europe. The company stated that it is exploring various options, including price adjustments, to mitigate the impact of rising costs on its operations.
