Temu and Shein Prices Climb as De Minimis Parcel Exemptions End

Two markets close the cheap-parcel route

For years, Shein and Temu could sell a $5 top because cheap parcels crossed borders without paying duty. That advantage is now gone in the two biggest Western markets. The visible result is higher prices. The more important result is that both companies have changed how they move goods.

In the United States, the de minimis rule let packages worth up to $800 enter without tariffs, fees or taxes. It ended for shipments from China and Hong Kong on May 2, 2025, and a July executive order extended the change to every other country.12 Congress then repealed the exemption for all commercial shipments in the One Big Beautiful Bill Act. Unless lawmakers change the law again, a cheap item shipped from overseas will carry the same duties as any other import.12

Europe followed a year later. On July 1, 2026, the EU dropped the customs exemption for e-commerce parcels worth under €150 and replaced it with a flat €3 duty.1 The EU's 27 finance ministers agreed to the measure in December 2025. It had originally been planned for 2028, but the date was brought forward as political pressure grew over the number of Chinese parcels arriving.4

The idea that Shein and Temu have "just started" raising prices is a little misleading. US prices moved more than a year ago. What is new is a second wave of increases in Europe, along with clearer evidence of what the US repeal did to shoppers.

What happened to US prices

The US increases were steep and fast. When CNN checked in April 2025, a Shein swimsuit set went from $4.39 to $8.39 in one day.12 In the last days before the exemption ended, Temu added import charges of 130% to 150% on goods still shipped from China. Many of those charges were higher than the price of the goods.12 CNBC reported one case where an $18.47 dress carried a $26.21 import charge, bringing the total to $44.68.15

Estimates of the overall increase vary, and the gap matters. Reuters found that a sample of low-cost Shein clothing cost 12.5% more by late May 2025 than in April, and a sample of pricier women's garments cost 23% more by late July.15 Another basket of the ten biggest movers went from $31 to $69, a 123% jump.15 Some recent articles say prices "doubled."1314 The careful reading is that the cheapest single items roughly doubled, while typical increases across a full catalog were smaller and varied by product, promotions and where the stock was kept.15

Shoppers reacted quickly. Temu's daily US users fell about 48% between March and May 2025.20 Bloomberg Second Measure reported that Shein's US sales fell 23% and Temu's fell 17% in the week after the increases.20

Fixed fees hit the cheapest orders hardest

The key problem for low-value parcels is that many of the new costs are fixed per package, not a percentage of the price. From August 29, 2025, a six-month US order let mail carriers pay a flat duty per package, with the lowest rate set at $80. On a $5 blouse, that is 16 times the price of the item.14 Economists writing a National Bureau of Economic Research working paper estimated that broker and processing fees add about $23.19 to each package. That works out to roughly a 17% tax on an average parcel, and more than four times the price of a $5 blouse sent on its own.12

Fixed fees fall hardest on people who buy cheap items one at a time, and those are often lower-income households. Quartz reports that families in the poorest neighborhoods now lose the largest share of their income to the change.12 One example: a Tampa accountant had two dog harnesses worth about $33 in her Temu cart. Import charges added about $46, pushing the total past $80, and she never completed the purchase.13

Europe's €3 duty is built differently

The EU took a different approach. It charges the €3 duty per type of product, not per parcel, based on six-digit tariff codes. Ten identical pairs of socks pay €3. Five wool pairs and five cotton pairs count as two product types and pay €6.4 Under the Commission's rules, the duty is collected from platforms and other businesses involved in the sale, not billed to shoppers at the door.9 In practice, the cost still reaches consumers through checkout prices.625

Coverage differs on how much prices will rise. One estimate puts the increase for low-value goods at 15% to 30%, depending on the product.10 Analyst Juozas Kaziukėnas said the duty has sometimes doubled the total cost of orders for the cheapest goods. Tests of mixed baskets suggest the higher figures are realistic. Xataka Móvil built an order worth €14.91 and was charged €33.05 at checkout, meaning taxes and fees exceeded the price of the goods.27 Portuguese economist Carlos Guimarães Pinto reported an effective tariff above 50% on a €20 purchase.25

The two companies have also handled the charge differently at checkout. Temu began showing the fee as a separate line, while Shein built the cost into higher prices. Temu also displays a personalized discount on some EU orders that it says covers part of the import charges.17

More costs are coming. The EU's handling fee must be in place no later than November 2026, when product identifiers on low-value shipments also become mandatory.9 France has already added its own fee of €5 per parcel.8 The €3 rate runs until July 1, 2028. After that, a new EU customs data hub is meant to apply normal product-specific duties to all imports, whatever their value.8

Why the EU acted

The numbers explain Brussels' urgency. About 5.9 billion low-value items entered the EU duty-free in 2025.8 Low-value packages make up 97% of imported items but only 2% of the value of the bloc's imports.9 Low-value e-commerce packages doubled to 4.6 billion in 2024, and more than 90% came from China.4 A Greek trade group estimates that about 65% of parcels are declared below their real value to avoid duty and compliance checks.2 The Commission also cites a 2025 finding that more than 60% of low-value imports failed safety or compliance standards.9

The bigger change: warehouses, not price tags

The most important development is not the price increases. It is that both companies now ship more goods from inside their customers' markets. Duties and fees on individual parcels are easiest to avoid for the largest companies, which can afford to set up local warehouses.

In the US, Temu stopped mailing most orders directly from China. By May 2025, its US site showed only products held in US warehouses, and China-shipped goods were marked out of stock.12 Shein says it now files full customs paperwork for US orders and has moved inventory and order handling closer to customers.12 One fulfillment-industry analysis says Shein still ships directly from China and has spread manufacturing to Turkey, Mexico and Brazil.20 The company's own disclosures point to a mixed model rather than a full move away from China.

That shift is costing Shein money. Its delivery cost per order rose to $17.90 in the year ended March 31, after two years of declines, mostly because of the tariff and customs changes.12 In the first quarter of 2026, getting orders to customers took nearly 48 cents of every dollar Shein earned, up from about 43 cents a year earlier.12

Europe shows the same pattern. Shipping trade outlet The Loadstar reported that Shein and Temu moved a meaningful share of their EU stock into warehouses inside the bloc before July 1. Orders sent from those warehouses count as domestic deliveries, so the €3 duty does not apply. Shein is adding warehouse space in Wroclaw, Poland.21 Shoppers in Latvia have noticed listings labeled as shipping from EU warehouses.28 Consumer guides in Spain now advise shoppers to choose those items to avoid the charge.27 Amazon is barely affected, since about 97% of its EU orders already ship from warehouses in the bloc.21

The effect on competition may be the opposite of what was promised. A tool meant to give European retailers a fairer chance could end up hurting smaller sellers who ship directly from Chinese suppliers. They now pay the €3 duty in full, while the biggest platforms avoid much of it through local warehouses. Goods moved into EU warehouses still pay customs duties when they arrive in bulk, but at commercial rates rather than the €3 parcel charge.2428 Retail groups have also raised a practical concern: with so many parcels, customs officers may be unable to count product types correctly, and many parcels could simply be charged a single €3.26

Our reading

The parcel-level trade model is ending on both sides of the Atlantic. Shein and Temu are not going away. They are turning into more conventional importers and becoming more expensive in the process. Temu's parent, PDD Holdings, kept growing revenue through 2025 and into 2026.17

The customers who lose most are the ones who bought a single cheap item at a time, because fixed fees take the biggest bite out of small orders.12 The platforms are paying more to deliver goods, but they can afford to adapt. The next round of regulation is likely to target what local warehouses can't solve: platform responsibility for what they sell and product-safety enforcement. Since March 26, Shein, Temu and AliExpress have been legally treated as importers in the EU and are responsible for whether their goods meet EU standards.23 That change may prove more lasting than any per-parcel fee.