The Trade War Reprieve Surrounding Shein and Temu Isn’t What It Seems

Back when the US deluged China with an unprecedented series of escalating, sky-high tariffs that culminated in a 145 percent tariff on goods coming from China, everyone was curiously (and for some, nervously) asking what it’d mean for Shein and Temu, the ultra-low-cost retailers that ship goods directly to consumers from factories in China for extraordinarily, comically low prices.

Prices on Shein and Temu were found to have leapt up to 377 percent on some products almost immediately. Now, a 377 percent increase on stuff that costs almost nothing also doesn’t amount to much, but it’s a wild increase overnight.

The US and China came to an agreement on Monday, May 12 to walk down the American tariffs on (most) Chinese goods from 145 percent to 30 percent for the next 90 days. People celebrated. Relief! Reprieve! But 30 percent is still far higher than it was when the administration entered the White House.

It’s a pattern with Trump. Make an outlandish decision, then walk it back, and when people are relieved that the end result isn’t as outlandish, claim victory.

where are shein and temu going from here?

“In the short term, [Temu and Shein] are definitely going to increase their shipment volume to the U.S.,” said Anand Kumar, associate director of research at Coresight Research, as reported in a CNBC story on Tuesday, May 13. Kumar added that the two companies will use the temporary pause to reassess their long-term strategies.

″(Thirty percent) is still high, but compared to 125 percent, 30 percent is basically nothing,” said Jason Wong, who once worked in product logistics for Temu in Hong Kong, according to the CNBC story.

The US ended the de minimis exemption to shipments from China, in which those valued at $800 or less were exempted from paying import duties, back on May 2. Wong told CNBC that since then, Temu had stalled shipments of product from China and relied upon stockpiles already in the US to fulfill orders headed to customers there.

“Under the latest tariff policy, Wong anticipates that bulk shipments subject to the 30% tariff rate will resume to the U.S., replenishing these stockpiles,” says CNBC. Where they go from there, who knows? “With the de minimis issue absent from Monday’s announcement, trade experts said the exemption did not seem to be coming back,” reported Reuters.

Businesses aren’t likely to invest in turning around their entire business operations when they’re not sure the policies will stay in place after they make their massive investments. Just ask all those apparel companies who moved manufacturing to Vietnam, only to see Vietnam on the same shit list regarding tariffs as China.

Updated May 15 to clarify that Jason Wong no longer works in product logistics for Temu.