Shein’s Robust US Growth Evaporates After Trump Tariff Hit

Shein Group Ltd.’s sales in the US have taken a hit since the Trump administration ended a tariff exemption for small shipments that helped fuel the fast-growing retailer’s growth.

The policy, called de minimis, ended Aug. 29, and in September Shein’s observed sales declined about 8 percent from the same period a year ago, according to data from Bloomberg Second Measure, which tracks the transactions of an anonymous set of US shoppers. That marked the second-worst monthly performance of the past three years.

The Trump administration has said one of the reasons it ended the policy, which allowed shipments worth no more than $800 to enter the US duty-free, was to even the playing field for US companies. Closely held Shein, founded in mainland China and now headquartered in Singapore, has been growing rapidly in recent years, aided by undercutting competitors on price with goods made in Asia. Quarterly sales nearly hit $10 billion in the first three months of the year, Bloomberg reported in July.

The end of de minimis will help Shein’s competitors in fast fashion, said Poonam Goyal, a senior analyst with Bloomberg Intelligence covering retail e-commerce. Other big players in the sector include H&M and Zara.

“The playing field has been levelled,” with the end of de minimis, Goyal said. “That means their prices aren’t as competitive as they were in the past.”

Shein didn’t respond to a request for comment for this story.

The White House’s first step on de minimis came in early May when it removed the exemption on shipments from China. Shein raised prices — including some dramatically — ahead of the change, Bloomberg reported at the time. The company’s US business also took a hit then, with monthly sales declining almost 11 percent, according to Second Measure.

Shein has since slowed its pursuit of an initial public offering. The retailer has also been diversifying its supply chain, including reducing its reliance on China.

Natasha Kuliecza, a sophomore at Rutgers University and frequent Shein shopper, said she has looked into alternatives, such as Amazon and Target, after seeing prices rise and delivery times lengthen at Shein.

“As a college student, I’m trying to save money with everything,” Kuliecza said. “So when I want more clothes, I’d rather just go the cheaper route.”

By Tonya Garcia, Uma Bhat

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