SHEIN, the trendy, low-cost online retailer of fast-fashion apparel, accessories and home goods, recently announced a sharp increase on U.S. consumer prices that will take effect April 25. By contrast, Temu is betting big. They are doing this by applying massive import tariffs of about 145% on products exported from China. Temu’s recent decision to offer this subsidy is a direct response to the tariffs on Chinese imports imposed by former President Donald Trump. These tariffs have truly turned both companies’ business models upside down.
The new tariffs apply to products importing into the U.S. from China. This latest increase comes on the heels of Trump’s termination of a long-standing customs exemption that let any goods valued under $800 enter duty-free. Even dollar store Shein has made the move to raise prices on its products. It has chosen not to introduce border adjustment taxes. This decision is indicative of a continued attempt to stay competitive while attempting to lessen the negative financial effects of the tariffs.
Temu’s solution, apparently, is to just eat the new import charges and make consumers pay that cost. The introduction of these new charges signals the start of a new age, as the company tries to navigate the expanding regulatory environment. As a result, millions of U.S. consumers will pay more than the products actually cost thanks to these fees. In many instances, this might even triple the cost of regular deliveries.
National Association of Manufacturers President Jay Timmons has called the 145% tariff on Chinese imports incredibly steep. This tariff is causing headaches beyond Temu and Shein – it’s causing them for the entire retail space. HQ photo Businesses are facing surging operational costs and are throwing all previous pricing paradigms out the window to reevaluate price positioning. In addition, the steep import duties can discourage buyers from ordering products they might otherwise buy, reducing sold quantities.
Shein is raising prices to account for the tariffs. Just now, we’re hoping to hear about how customers will respond to Temu’s new import duties. According to market analysts, consumers will change their shopping habits as buyers choose between the two stores.