Online retail giant Shein reported a $99 million quarterly loss due to the elimination of an import duty exemption on small packages by former US President Donald Trump. The removal of the “de minimis” tax rule, which allowed duty-free entry of imports valued under $800, impacted all commercial shipments with the imposition of standard customs duties and tariffs. Companies like Shein, benefiting from the previous exemption, faced challenges in selling and shipping low-value items from China.
Shein acknowledged the adverse effect of the US de minimis exemption removal on its US sales and overall revenue growth since May 2025. However, the company noted signs of consumer behavior normalization and sales trends improvement in the US recently. The $99 million loss contrasts sharply with the $395 million profit recorded a year earlier, though sales slightly increased by 1.1% to $9.05 billion.
The first-quarter loss also accounted for a $328 million hit from an accounting change related to special investor shares as Shein prepares for its upcoming stock market debut in Hong Kong. In the UK, overseas retailers could previously send parcels valued under £135 without import duties, but this loophole is set to close earlier than planned in October 2028.
Meanwhile, the EU has implemented a temporary €3 customs duty per item on low-value goods up to €150 until July 2028, after which standard customs duties will apply. Shein expressed concerns over the EU’s removal of the small parcel exemption, anticipating a potential adverse impact on its business, financial status, and operational results. The group contemplates raising prices in the US and Europe to counter the sales impact arising from increased duties and taxes.
Shein stated, “In response to the elevated duties and taxes, we are exploring various options, including price adjustments in the US market to mitigate a portion of the increased costs.”
