De Minimis Repeal Keeps Shein and Temu Prices Higher for Good

The day cheap stopped being so cheap

Price trackers watched Shein and Temu for a short stretch in the spring of 2025. Those snapshots turned out to show more than a brief tariff spike. They recorded the first stage of a lasting change in how low-value parcels enter the United States. Looking back with a year and a half of hindsight, the item-level jumps matter less than the policy behind them. The duty-free lane that both platforms were built on is now closed, and it has been locked shut.

Both companies said ahead of time that prices would change. In nearly identical notices posted in mid-April 2025, Shein and Temu said shifting trade rules and tariffs had raised their operating costs and that "price adjustments" would begin April 25.15 Supply Chain Dive pointed out that the two rivals have no affiliation, yet their customer messages matched word for word apart from the company names.5 The timing was set by Washington. The exemption that let packages worth up to $800 enter duty-free was due to end for Chinese goods on May 2, and the replacement was a 120% tariff or a flat per-package charge of $100, rising to $200 on June 1.3

What the price trackers actually found

Every outlet that tracked prices found increases. They disagreed sharply on how big those increases were, and the disagreement tells you something.

CNN saw a Shein swimsuit set go from $4.39 to $8.39 in one day, a 91% increase. Over the same day, a pair of Temu patio chairs rose from $61.72 to $70.17, and a smart ring on Temu got about $3 cheaper.3 USA TODAY checked dozens of listings. Some had more than doubled, while others were flat or lower. Its sample of five popular Shein items showed little change.1 Bloomberg's figures, as reported by The Hill, looked much worse. The average price of Shein's top 100 beauty and health products rose 51% in a week, and a 10-piece kitchen towel set went up 377%.28 The Krazy Coupon Lady followed 20 items under $50 on each site from April 18 to 27. It found average increases of 11% at Shein and 32% at Temu.2

The headline numbers hide a lot. In Bloomberg's own breakdown, home and kitchen goods and toys rose more than 30% between April 24 and 25, while women's clothing rose 8%.28 Women's clothing is Shein's core business. Readers who looked closely at the data saw this right away. One commenter noted that the 377% towel set had gone from $1.28 to $6.10.10 On the evidence, the extreme figures were real but unusual. The more typical effect was a moderate increase on the sticker price plus extra costs at checkout.

Two companies, two ways of passing on the bill

The biggest difference between the platforms was how they showed the cost to shoppers. Shein put the tariff into the listed price and added a checkout banner promising that buyers would never owe anything extra on delivery.128 Temu at first listed a separate "import charge" line. These charges were often huge. The Krazy Coupon Lady found an $87.12 import charge on 10 men's shirts that cost $64.15, and a $17.71 charge on tablecloths priced at $13.22.2 A 14-in-1 power strip listed at $19.34 cost $48.32 once $27.49 in import charges were added.28 Quartz reported that in the last days before the exemption ended, Temu was applying import charges of 130% to 150% on goods it still shipped from China.9

Temu also found a way around the charges: its "Local Warehouse" tab. USA TODAY found that the April increases fell mostly on items shipped from outside the U.S., while goods already in American fulfillment centers were largely spared.1 By May 2025, Temu's U.S. storefront showed only items shipped from domestic warehouses and listed China-shipped goods as out of stock.9 That was the most important strategic move of the episode. Temu's answer to the tariffs was to stop sending individual parcels across the Pacific.

Why low-value parcels get hit hardest

The economics show why a $5 blouse suffers more than a $200 suitcase. A fixed charge per package grows in proportion as the item gets cheaper. From August 29, 2025, carriers could pay flat per-package duties for six months, and the lowest of these was $80. For a $5 blouse, that is 16 times the price of the item.9 An NBER working paper estimated that broker and processing fees add about $23.19 to each package. That is about a 17% tax on the average parcel and more than four times the value of a $5 item sent on its own.9 Measure Protocol, a consumer-data firm, summed it up: a wardrobe built from $4 to $12 items does not survive in a world where the same items cost $15 to $30.9

The same research shows who pays. The economists estimated the annual cost to the average American household at about $136. Nearly three-quarters of foreign goods shipped to the poorest zip codes had come in duty-free, compared with about half in the richest.9 With the exemption gone, the average tariff on goods ordered from abroad by the poorest Americans went from nearly zero to almost 12%.9 CNN had flagged earlier research by UCLA and Yale economists that reached the same conclusion: ending de minimis falls hardest on lower-income households.3 This is the central point of the story. A rule sold as a crackdown on fraud and drugs works, for the people who pay most of it, as a regressive consumption tax.

From temporary order to permanent regime

In spring 2025, many expected the policy to swing back. That hasn't happened, and it now looks very unlikely. Duty-free treatment ended for China and Hong Kong on May 2, 2025, and President Trump extended the suspension to every country in July.9 Executive Order 14324 took effect August 29, 2025, and required non-postal shipments of any value to go through formal entry. Carriers had to switch to ad valorem duties by February 28, 2026.15

The legal challenge to Trump's tariffs did not bring the exemption back. On February 20, 2026, the Supreme Court ruled in Learning Resources, Inc. v. Trump that the emergency-powers law could not be used to impose the extra tariffs. Trump signed an order keeping the de minimis suspension in place that same day.22 On June 24, 2026, CBP wrote the indefinite suspension into its own regulations through two interim final rules, one covering mail and one covering every other mode of shipment.1112 The One Big Beautiful Bill Act separately repeals the statutory exemption effective July 1, 2027. That means only Congress can reverse it.11

CBP's figures show how much this changes. Shipments that once qualified as de minimis reached 1.36 billion in fiscal 2024.18 More than 940 million cheap packages still arrived last year, about a quarter fewer than in 2024. Between May and December 2025, CBP collected more than $1 billion in duties on them.9

The bill comes due on the balance sheet

The platforms are now paying the cost in their own accounts. Shein says it files full customs paperwork on U.S. orders and has moved inventory closer to its customers. Its fulfillment cost per order rose to $17.90 in the year ending March 31. In the first quarter of 2026, delivery took nearly 48 cents of every revenue dollar, up from about 43 cents.9 Shein's U.S. revenue fell about 14% year over year in that quarter, even as its sales grew in Europe and elsewhere.9 The leadership of Temu's parent, PDD Holdings, has said it will keep adding local merchants and building warehouses faster.9

The 2025 price increases are also now in court. Class actions filed in Illinois say the companies raised prices, some by as much as 377%, to cover tariffs that were later ruled unlawful, and kept the money rather than passing refunds on.25 Those cases face a complication. The emergency tariffs fell, but de minimis duties continued on separate legal grounds.22

Europe follows the same path

The U.S. is no longer acting alone. On July 1, 2026, the EU ended its €150 customs-duty exemption and replaced it with a temporary flat duty of €3, charged per tariff category in each parcel rather than per parcel.1624 One analysis puts that at about a 10% tariff on a typical €30 Temu order. A box holding three different kinds of product could owe €9.26 Google Shopping data reportedly showed Temu and AliExpress pulling back from ad auctions once the levy started.26 European consumer advocates presented the change as a product-safety measure.17

The verdict

The item-by-item tracking from April 2025 tells only part of the story. Prices rose unevenly, and the most dramatic increases hit cheap household goods more than clothing. In my reading, the larger shift is structural. Shipping a $3 item on its own from a Chinese factory to an American doorstep used to be a viable business, and on both sides of the Atlantic it is now ending. Shein and Temu are still operating, but they are becoming more like the warehouse-based retailers they used to undercut. The shoppers who gained most from the old model, those in the poorest zip codes, are the ones paying for the change.