Online retailers are being majorly affected by President Donald Trump’s tariffs and handling of the de minimis exemption.
Just take a look at the price hikes Reuters saw from Shein, a fast fashion e-commerce retailer based out of Singapore. A “baby bodysuit” rose in price 63 percent from April 24 to July 22, according to Reuters. During the same time period, a kid’s t-shirt increased by 68 percent, a pair of boy’s shorts increased by 57 percent, a boy’s t-shirt increased by 45 percent, a girl’s tank-top increased by 52 percent, a baby shirt increased by 24 percent, a girl’s camisole top increased by 35 percent, and a girl’s dress increased by 10 percent, just to name a few of the recent price hikes.
“Reuters tracked the price of 70 of the lowest cost apparel items listed on Shein’s U.S.-facing website in girl’s, boy’s, men’s and baby categories on April 24, one day before Shein’s price adjustments went into effect to accommodate new tariff rules starting May 2, which at the time exposed these packages to steep tariffs of up to 145 [percent],” Reuters reported.
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These price hikes are likely due to the elimination of the de minimis exemption, according to Reuters.
On May 2, Trump ended the de minimis exemption. That means that packages worth less than $800 entering the U.S. from China are no longer tax-exempt. Trump’s official reasoning is that sellers use the exemption to ship illicit substances like fentanyl in low-value packages. While lawmakers on both sides of the aisle agree that a reform on the de minimis provision could slow the spread of drug trafficking in the U.S. and help U.S. manufactures, some argue its effectiveness in both curbing illegal drugs and helping U.S. manufacturing, and are suspicious of the timing coinciding with his ongoing trade war.
And, as Reuters pointed out in a working paper published by National Bureau of Economic Research last year, eliminating the exemption “will cost U.S. consumers between $10.9 billion and $13 billion overall, but the relative cost per person will be higher for lower-income Americans.”
These tariffs and the ending of the de minimis exemption don’t only affect Shein, although it is one of the largest e-commerce companies effected. Influencers, content creators, and entrepreneurs, particularly those who sell their own goods and work with brands who sell under the de minimis exemption, are also feeling the pain.
