Fast fashion faces price hike as U.S. closes China import loophole, pushing shoppers to thrifting

Fast-fashion giants Shein and Temu are raising prices as a key U.S. trade exemption expires Friday, and shoppers have already felt the impact.

The long-standing “de minimis rule,” which for years has allowed imported goods valued at less than $800 to enter the U.S. without duties or customs paperwork, will no longer apply to goods from mainland China and Hong Kong, where most of the inventory sold by the two companies is located.

Prices of several popular items on Temu have increased dramatically in recent days. A 3-in-1 portable air conditioner that was $21.47 now costs $30.67. A men’s graphic tennis T-shirt jumped from $9.93 to $14.43. Even basics such as girls’ hoodies and power strips have doubled in price.

Josh Levine, director of technology policy at the Foundation for American Innovation, which promotes limited regulation in the technology sector, told The Washington Times that closing the loophole will likely benefit lower-income and younger shoppers who might have relied on the cheaper clothes the Chinese companies offer.

“I can’t say that it’s bad that people are wearing fewer clothes infected with lead. But at the same time, it’s hard to generalize that across every single purchaser and every single person. It’s a personal issue,” Mr. Levine said. He cited research from the South Korean government trade agency that found lead, formaldehyde and phthalate-based plasticizers in Chinese fast fashion last year.

Shein told The Times last year that its clothing had no illegal levels of toxic chemicals.

Kate Nishimura, features editor at Sourcing Journal, told New York Magazine that “de minimis is the backbone of [Shein’s and Temu’s] business model.”

Now, all de minimis shipments from China and Hong Kong will be assessed at 30% of their value or $25 per item, whichever is higher. That figure reflects an across-the-board tariff increase.

Commercial carriers such as FedEx and UPS are now required to collect duties at a rate of 145% on declared item value. The U.S. Postal Service will charge either a 120% tariff or a flat fee of $100 per package, rising to $200 on June 1.

Freight traffic between the U.S. and China is already declining. Logistics experts warn that new rules could add pressure to ports and shipping systems recovering from pandemic disruptions.

Kristen Classi-Zummo, an apparel industry analyst at the market research firm Circana, told The Associated Press that economists expect the resale market to grow.

“What I think is going to continue to win in this chaotic environment are channels that bring value,” Ms. Classi-Zummo said.

Mr. Levine agreed. “Used [clothing] is just going to be safer and be worth more,” he told The Times.

Thrifty shoppers

Thrift stores, where shoppers can find equivalent, low-priced goods, have been quietly building a broad U.S. customer base for years.

ThredUp’s 2024 Resale Report said 58% of U.S. consumers shopped secondhand last year, the highest on record. This figure was higher among millennials and Generation Z, at 68%. Nearly half said they check thrift options before buying new.

“Secondhand prices are going to be much more compelling in relative terms,” Alon Rotem, chief strategy officer at retail site ThredUp, told USA Today. “In the era of tariffs, it’s an even more unique way to shop and get what you’re looking for, and see prices not rise.”

The expected growth in thrift won’t be just an American phenomenon. Fueled mostly by Gen Z’s thrift-loving habits, the global secondhand clothing market is on track to outpace the rest of the fashion industry threefold by 2027, according to ThredUp.

Even the prices of thrifted products are expected to rise.

Kristin Langenfeld, CEO of baby gear resale platform GoodBuy Gear, said she is bracing for price increases across dozens of brands.

“Every one of them that we’ve talked to has either already or is in the process of increasing prices on almost all of their products,” she told USAToday.

Babylist, a popular baby registry platform, reports that 67% of expectant parents now report secondhand as their primary savings strategy.

Kelsey Meyers, a mother of four in Minnesota who has been thrifting since her teenage years, told USA Today that she has seen prices tick upward at her local thrift stores as a result of the Trump administration’s tariff scuffles. Still, she said, she prefers secondhand.

“You’re still getting a deal, but … it’s not what it used to be,” she said.

Mr. Levine said online thrift platforms such as eBay, ThredUp and Poshmark will fill the gap for more rural shoppers without nearby physical thrift stores. He added that their business model ensures quality is more likely to be higher than Chinese imports.

“EBay, for instance, does a really good job of buying, selling and verifying the quality of clothes, quality of seller, ensuring that it protects you when you spend your money, that you’re actually going to get what you ordered, and if you didn’t — cover you,” Mr. Levine told The Times. “These online stores sell real higher-end fashion stuff.”

Nevertheless, the rising demand for thrifted finds may stretch supply thin, online or otherwise. Sheng Lu, a fashion trade professor at the University of Delaware, said secondhand children’s clothing could become harder to find.

“I’m afraid that the supply can be more limited,” Mr. Lu told USA Today. He said lower-income families may increasingly have to “make do with less.”

De minimis reform

Chinese officials haven’t spoken directly about the de minimis closure, though the Foreign Ministry has expressed frustration with President Trump’s tariff strategy overall.

Foreign Ministry spokesman Lin Jian told China Daily earlier this year that the tariff measures “seriously undermine the principles of the market economy and international trade rules.”

In response to the U.S. crackdown, Beijing has imposed retaliatory tariffs of up to 125% on American goods, further escalating the trade standoff between the world’s two largest economies.

U.S. Customs and Border Protection said more than 70% of the 216 million packages entering the U.S. in January and February originated from China. Officials estimated that up to 4 million such low-value parcels would arrive daily, most of them duty-free, until now.

Reuters reported that Shein and Temu had slashed their advertising budgets, including 31% on Google and 19% on Meta.

A Shein spokesperson told The Times last year that the company supported de minimis reform, even as the shopping giant faced accusations of loophole abuse.

“SHEIN makes import compliance a top priority, including the reporting requirements under U.S. law with respect to de minimis entries,” the spokesperson said in an email. “We reaffirm our executive chairman’s call for [de minimis] reform that ensures a level, transparent playing field where rules are applied equally.”

For now, retailers, families and policymakers are watching what happens.

“Parents need to buy a stroller, they need to buy a bassinet, they need to buy a high chair,” Ms. Langenfeld said of products many new parents buy from Chinese manufacturers. “These aren’t optional purchases.”

Not every fashionista welcomes the lifestyle shift sparked by the loophole’s closure.

“I’m a naturalized citizen of immigrants and when we immigrated we absolutely had nothing for a pretty long period of time,” a shopper on Reddit wrote this week, insisting that Shein’s and Temu’s product quality is higher than is commonly reported.

“As an adult it took me a while to set myself up and have $ to buy nice new things that these Asian suppliers sell,” the Reddit user added. “It finally made it feel like I get to have nice things too. … I feel like all of this is basically punishing the low to middle income class in a very severe way.”

The Washington Times has reached out to Shein and Temu for additional comment.