What: Trump's elimination of the USD 800 de minimis rule threatens Shein and Temu's business models while potentially strengthening Amazon's market position.

Why it is important: This regulatory shift marks a turning point in global e-commerce, as major markets including the US and EU move to close loopholes that enabled Chinese ultra-fast fashion retailers' rapid growth. Donald Trump's decision to eliminate tariff-free access for small goods from China marks a significant shift in US trade policy, particularly affecting Chinese e-commerce giants Shein and Temu.

The removal of the de minimis exemption, which previously allowed duty-free entry for shipments under USD 800, requires US customs to formally clear every package from China. This change could substantially impact companies whose success has relied on efficient delivery of low-cost Chinese goods, with analysts estimating these platforms accounted for over 30% of tariff-free shipments to the US. The new policy affects approximately 4 million daily shipments, with more than half originating from China. The average order value of USD 50 contributed to USD 47.8 billion in eligible goods shipped in the first three quarters of 2024. While Shein maintains its products will remain competitive through demand-based production, Amazon may benefit by avoiding a "race to the bottom" in pricing. The policy change arrives amid growing Western scrutiny of Chinese e-commerce platforms, including concerns about unfair competition and product standards.

IADS Notes: The elimination of de minimis rules by Trump represents the latest development in an escalating series of regulatory challenges facing Chinese e-commerce giants. As reported in February 2025, the EU implemented similar measures targeting platforms like Shein and Temu, requiring direct liability for product compliance and duty collection. This regulatory pressure has prompted significant business model adaptations, with Amazon responding in November 2024 by launching "Haul," a platform mimicking Chinese competitors' direct-from-China shipping model.

The timing is particularly significant as Forrester predicted in October 2024 that both Shein and Temu would face declining growth rates in 2025 due to mounting scrutiny and operational challenges. While China attempted to support its e-commerce sector in December 2024 by streamlining export procedures, the January 2025 UK parliamentary investigation into employment practices suggests a growing global trend toward stricter oversight of cross-border e-commerce operations.

Donald Trump’s crackdown on trade loophole to hit Shein and Temu — and help Amazon