On Feb.1, President Donald Trump followed through on his promise to implement a 25% additional tariff on imports from Canada and Mexico, including a 10% additional tariff on imports from China.
According to the White House website, Trump’s decision was in response to an “extraordinary threat posed by illegal aliens and drugs.” The Trump administration believes that the President is taking bold action to hold Mexico, Canada, and China accountable for their promises of halting illegal immigration and stopping fentanyl and other drugs from flowing into the U.S.
BBC News defines tariffs as taxes charged on goods imported from other countries. Our government receives taxes from the businesses that import our goods from overseas. Tariffs are percentages of a product’s value. So, today in China, this means an additional $1 charge would be applied to a product worth $10.
If you plan on ordering your spring wardrobe from SHEIN, you might notice that their well-known cheap prices have slightly increased. According to Wired, this is because SHEIN is one of the biggest Chinese-owned e-commerce platforms operating in the United States. Wired stated that the app began raising prices and temporarily un-listing some products on their websites in response to these new tariffs.
Additionally, the tariffs are affecting SHEIN in the processing of their orders. Customers might find the processing of their orders taking considerably longer than before. This is because, according to NPR, the tariff also canceled a minimum exception for inspections on shipments.
What does minimum exception for inspection mean?
According to USA Today, the de minimis exemption refers to Section 321 of the Tariff Act 1930. In cases where collecting taxes would be more difficult than the revenue would be worth, it permits the Secretary of the Treasury to waive certain charges or fees.
Stated differently, this might be viewed as a trade loophole that permits duty-free shipping of low-value items to the United States. Reuters stated that more than 30% of all daily packages shipped under de minimis are from brands like Temu and SHEIN.
According to Forbes, the de minimis exemption could be connected to SHEIN’s past low prices. Since we were able to import goods from China without paying tariffs or duties, it kept those prices low. A congressional research report shows that in 2022, more than 80% of all U.S. e-commerce shipments were subject to de minimis. Another statement from NPR talked about the different options SHEIN will eventually have to consider. It is said that SHEIN executives will either have to continue raising prices or change the way they run their business.
The average rate of imports could climb back to a high not seen in over 50 years. Based on a report from the Tax Foundation, Trump’s tariffs would take the average tariff rate on all imports to highs not seen since 1969. In addition, there is historical evidence that tariffs raise prices and reduce economic growth. According to the Tax Foundation and based on historical data, tariffs increase costs and limit the number of products and services that U.S. consumers and businesses may purchase, which lowers economic output, employment, and income.
SHEIN is trying to combat these tariffs by expanding Vietnam’s production. According to Investment Monitor, “the plans have been ongoing for a few months and involve the company offering incentives to its Chinese suppliers to shift some production to Vietnam, people familiar with the subject told Bloomberg.”
While SHEIN’s future remains uncertain due to tariffs implemented by the Trump administration, one thing is certain: the fast-fashion industry is changing, and it’s changing fast.