De Minimis Hits Temu and Shein Sales

Retail giants Shein and Temu, known for their low-cost, direct-to-consumer goods shipped from overseas, experienced a noticeable sales slowdown following former President Donald Trump's February announcement targeting tariffs and the de minimis import loophole.

According to Earnest Analytics, which tracks debit and credit card spending from millions of U.S. consumers, Shein was hit the hardest. Between the weeks ending February 1 and February 22, Shein’s year-over-year sales growth dropped sharply from 22% to just 9.6%. Temu also saw a dip, but it was far less dramatic—slipping slightly from 15.4% to 14.4%.

By the week of March 1, however, Shein had bounced back, posting a 21.4% year-over-year growth rate. This rebound suggests the dip may have been more about headlines than real policy changes—a signal of how closely consumers follow political news when it comes to their wallets.

“Nothing materially changed from an import perspective for Temu and Shein during February, and yet customers made fewer transactions during that period,” said Michael Maloof, head of marketing at Earnest Analytics. “The later recovery suggests this pullback could have been more news-driven than fundamentals-driven.”

What’s Behind the Concern?

The de minimis loophole—a legal provision that allows imports under $800 to enter the U.S. duty-free—has been a cornerstone of Shein and Temu’s ultra-low-cost strategy. Trump’s executive order to close the loophole, alongside new tariffs on imports from China, Canada, and Mexico, caused concern throughout the e-commerce industry. (Some of those tariffs on Canada and Mexico have since been rolled back.)

The de minimis rule (Section 321) has exploded in use, going from 139 million packages in FY 2015 to over 1.36 billion in FY 2024, according to U.S. Customs and Border Protection. While Shein and Temu have become the public faces of de minimis imports, many other direct-to-consumer brands also rely on the provision to reduce costs.

Though Trump later amended the order, keeping the loophole temporarily open while customs officials figure out a new duty collection process, the writing is on the wall: the days of duty-free $5 sunglasses and $3 crop tops may be numbered.

A Preview of What’s to Come?

The brief sales slump may be just a preview of the larger disruption ahead if de minimis is officially closed. With logistics experts expecting changes soon—even without a specific timeline—brands that rely on cross-border shipping will need to rethink their pricing, fulfillment strategies, and margins.

For now, consumer behavior appears reactive, driven by headlines rather than real policy. But if the de minimis door shuts for good, Shein, Temu, and many others may find their low-cost edge dulled—and their U.S. sales facing a far more permanent slowdown.