Chinese low-cost shopping apps Temu and Shein published nearly identical notices this week informing customers that they are planning to raise prices on April 25 in response to President Donald Trump closing a critical shipping loophole that exempted them from duties and imposing onerous tariffs on Chinese imports.
“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up,” the websites of both companies informed in a notice to shoppers. “To keep offering the products you love without compromising on quality, we will be making price adjustment starting April 25, 2025.”
“Until April 25, prices will stay the same, so you can shop now at today’s rates,” the notice clarified.
Temu and Shein are competitors that specialize in low-cost products shipped directly to Americans from China, rather than being sold wholesale to retailers in the United States. Shein primarily sells “fast fashion” clothing items targeting young women, while Temu sells clothing in addition to household goods, toys, and other miscellaneous products.
The two companies have for years benefitted significantly from an American duty loophole known as de minimis, which exempts shipments from abroad worth less than $800 from duties, tariffs, and rigorous inspection to ensure the products comply with American labor laws. The vast majority of purchases on both sites is far below the $800 limit, ensuring that the companies were exempt from paying duties that other retailers were subject to.
“The de minimis provision is foundational to Shein and Temu’s business models,” the House Select Committee on the Chinese Communist Party explained in a 2023 report on the companies, titled “Fast Fashion and the Uyghur Genocide.” In addition to allowing the companies not to pay duties that others who sell their products to retailers must, it permitted the companies to avoid scrutiny under the Uyghur Forced Labor Prevention Act (UFLPA), which bans products from East Turkistan, where China is currently engaging in a genocide of the indigenous Uyghur people, from being shipped into America unless a company can prove its supply chain is free of slavery. Slavery is a critical pillar of the Uyghur genocide; the Chinese government, human rights activists have revealed, encourages companies to buy Uyghur slaves in “batches” on websites.
“The fact that the vast majority of products shipped from both Shein and Temu to American consumers fall under the de minimis exception means that these companies avoid customs duties — making each product cheaper — and are less likely to face the same level of customs scrutiny that other retailers might face on a formal entry,” the 2023 report observed.
American lawmakers and human rights have accused both companies of benefitting from an expansive, state-sponsored slavery operation in China linked to the ongoing genocide of the indigenous Uyghur people of East Turkistan, in particular by using cotton picked by slaves in the region. A 2022 report by Bloomberg News found East Turkistani cotton in Shein products; Shein’s legal team has since insisted it does not use the material in products shipped to America, but does not “prohibit the use of Chinese cotton in our products specifically where such use would not contravene the laws and regulations of the jurisdictions in which we operate.” Temu, according to a 2024 report, encouraged suppliers to use Chinese slave-linked cotton in its products.
“Temu is doing next to nothing to keep its supply chains free from slave labor,” House Select Committee on the Chinese Communist Party chair Rep. Mike Gallagher (R-WI) said following the publication of a report on the relationship between these companies and the Uyghur genocide in 2023. “At the same time, Temu and Shein are building empires around the de minimis loophole in our import rules — dodging import taxes and evading scrutiny on the millions of goods they sell to Americans.”
President Trump initially announced a plan to close the de minimis loophole in February, but postponed the imposition of the new policy to allow relevant government agencies to prepare logistically for a dramatic increase in collecting the charges involved. The loophole is now expected to end on May 2, meaning from that day on Shein and Temu will have to pay the same tariffs and duties other companies do on their shipments.
In the latest executive order on the policy, the president wrote that ending the loophole and imposing higher tariffs on China was “necessary and appropriate to effectively address the threat to U.S. national and economic security posed by the PRC’s [China’s] contribution to the conditions reflected in large and persistent trade deficits.”
As part of a complete overhaul of American trade policy, President Trump announced the imposition of tariffs on nearly every American trade partner on April 2, which he deemed “Liberation Day.” Most of those tariffs have since been postponed as nations sent delegations to Washington to renegotiate deals more favorable to America except for those on China, as the Communist Party retaliated with its own tariffs on American goods. As of Thursday, the Trump administration has imposed 145 percent tariffs on Chinese imports in addition to pre-existing tariffs.
The expectation of price increases appears to have affected the popularity of some Chinese discount apps. According to CNBC, “downloads of Temu on Apple’s App Store have fallen 62% in recent days” as of Thursday. This has created a space for other Chinese e-commerce companies in cutthroat competition with Shein and Temu, bolstered in part by propaganda on the Chinese social media app TikTok promoting purchases from rivals.
Following President Trump’s tariff announcement, a torrent of videos began appearing on TikTok claiming that Chinese factories make many luxury goods and sell them at steep discounts to domestic Chinese consumers. According to the Chinese state propaganda outlet Global Times, Apple’s app store has seen a surge in downloads for apps such as Taobao, a subsidiary of the Alibaba shopping empire, and DHgate in the United States. The Times claimed that Shein also remains popular, though Temu downloads have declined.
