Prices on products from Temu and Shein have increased significantly as the two companies prepare for new tariffs set to take effect next week. Both companies had informed shoppers of these price hikes in advance.
Temu and Shein, which primarily source their goods from China, had previously benefited from a tariff exemption on items worth less than $800, known as “de minimis.” However, this exemption is expiring on May 2, following an executive order signed by President Donald Trump earlier this month. After that date, businesses will either have to pay a 120% tariff or a flat $100 fee per postal item, with the fee rising to $200 on June 1.
For example, two patio chairs on Temu were priced at $61.72 on Thursday, but by Friday, the price had risen to $70.17. Similarly, a bathing suit set on Shein cost $4.39 on Thursday, and by Friday, the price jumped to $8.39, representing a 91% increase. However, not all products saw price hikes. For instance, a smart ring on Temu was listed for about $3 less on Friday compared to Thursday.
While online prices fluctuate regularly, it’s unclear why some products saw price increases while others did not. Both companies cited higher operating expenses due to global trade changes and tariffs, with Shein explaining that to maintain product quality without raising prices too much, they had to adjust their pricing.
Both Temu and Shein urged customers to make purchases before April 25 to avoid the higher prices. However, it’s unclear if orders placed before this date will avoid the 120% tariffs if they arrive after May 2.
The tariff changes will disproportionately affect lower-income households. According to a report by Trade Partnership Worldwide, the poorest households in the U.S. spent more than three times their share of income on apparel compared to wealthier households in 2021. Research from UCLA and Yale economists also showed that the end of the de minimis exemption would impact lower-income communities the most, as these households are more likely to receive packages under the tariff exemption threshold. The study found that 48% of packages shipped to the poorest zip codes were under the de minimis threshold, compared to just 22% for the wealthiest areas.