📦 Temu and Shein’s Competitive Edge
The White House is moving to limit e-commerce platforms like Shein and Temu from using the de minimis exemption. This rule allows imported goods valued under $800 to avoid duties. Despite the changes, experts say Shein and Temu will continue to compete strongly against U.S. retailers. They’ve already diversified their supply chains to reduce the risks from these regulations. Shein has expanded manufacturing to Turkey, Mexico, and Brazil, and Temu has started storing goods in U.S. warehouses. This enables them to streamline shipping processes and lower costs even as duties rise.
💼 How Smaller Businesses Will Struggle
Unlike the e-commerce giants, smaller businesses may face more difficulties. They rely heavily on direct-to-consumer shipping from China. Changes to the de minimis exemption will require these companies to comply with complex customs procedures, like classifying goods under the 10-digit Harmonized Tariff Schedule. Flexport noted that smaller businesses will likely need to hire licensed customs brokers, which adds to their costs. According to Cindy Allen from Trade Force Multiplier, many don’t have the resources to navigate this complex system.
🇨🇳 Supply Chain Shifts Already in Motion
Shein and Temu's proactive strategies include expanding their operations outside of China. Shein is already producing goods in the U.S. using a print-on-demand model. These shifts help them bypass some tariffs. Meanwhile, Temu is adopting a semi-managed logistics approach, which allows it to bulk-import items for later distribution within the U.S. Both companies continue to monitor these policy changes, but they don't rely on the de minimis exemption for growth, according to statements by company representatives.
🔎 What’s Next for U.S. Import Rules?
The White House's proposal still faces many obstacles. Craig Radford, co-CEO of Wizmo Solutions, pointed out that legal challenges, lobbying, and bureaucratic delays could slow the rule changes. Trade-focused policies like this often take months to finalize. For smaller businesses that might struggle to adapt, there may be options like shifting production to countries such as Vietnam, which could avoid some of the most costly tariffs. However, businesses will need to stay agile to handle the upcoming changes to U.S. trade rules.
Can small businesses survive the new U.S. import policies?
