Within his first month of taking office, President Donald Trump’s policies have continuously made headlines. One of the most widely discussed has been the tariffs placed against the United States’ top 3 trading partners: China, Canada and Mexico.
“President Donald J. Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China,” a White House fact sheet, written Feb. 1, 2025, said.
Tariffs are taxes that are imposed on imports from other countries. While a discussion with leaders from Mexico and Canada led to a one-month delay in tariffs on those countries, the effects of tariffs against China are already becoming visible in American markets. Companies like Temu and Shein are now forced to pay a tax to the U.S. government, which could lead them to increase prices for American customers to cover the extra cost.
The orders placed against these three countries aim to shut down a trade loophole known as “de minimis.” De minimis has existed since the 1930s, and has allowed exporters to ship packages under $800 into the United States without duty or other taxes. Part of the reason why the tariffs target Chinese companies is because of the exponential success of companies like Temu and Shein, owned by PDD Holdings and AliExpress, owned by Alibaba.
In 2024, email and SMS platform Omnisend conducted a survey of 1000 Americans, finding that 70% “shopped at global and Chinese online marketplaces in the last year.” That statistic was further broken down into “half 57% shopping at Temu, 43% at Shein, 33% at TikTok Shop and 20% at AliExpress.”
Gen Z is one of the demographics who engage with these marketplaces the most. A 2024 survey by eMarketer found that 44% of Gen Zers make “at least one purchase on Shein monthly” and that 41% make one monthly purchase from Temu.
In one statement, a Temu spokesperson said that the company uses “an efficient business model that cuts out unnecessary middlemen, allowing [Temu] to pass savings directly to [their] customers.” They also added that “Temu’s growth does not depend on the de minimis policy.”
This is not the first time concerns have been raised over the de minimis loophole. Last September, the Biden administration released a statement explaining some of the impacts of Chinese e-commerce on the U.S. economy.
“The majority of shipments entering the United States claiming the de minimis exemption originate from several China-founded e-commerce platforms, putting American consumers at risk, undercutting American workers and businesses, and resulting in the importation of huge volumes of low-value products such as textiles and apparel into the U.S. market duty-free,” the White House statement said.
Prior to the implementation of the new tariffs, the fall of Temu and Shein was projected to increase sales for American online markets like Amazon, eBay, and Etsy. According to Bloomberg Second Measure, which analyzes data from credit and debit cards, “Shein’s US sales fell 16% to 41% for five days from Feb. 5,” and “Temu notched a fall of as much as 32% during the period.”
Due to the new administration’s tariffs, China retaliated by imposing its own 15% tariffs on American coal and liquefied natural gas and 10% tariffs on crude oil and farm equipment. These took effect Feb. 10.
Economic experts say that the establishment of the new tariffs will lead American consumers to experience a rise in prices across products beyond fast fashion, impacting everything from fresh produce to gas prices to construction materials. In the end, it is still unclear what the long-term effects of the tariffs will be.