US Trump Tariffs: Key Implications for China’s Ultra-Fast Fashion

US Trump tariffs, reinstated in April 2025, revoked the de minimis exemption for Chinese shipments, introducing new tariffs on small packages and bulk imports. This shift threatens China’s ultra-fast fashion sector, by raising operational costs and disrupting their business model based on low-value, high-frequency shipments.

In early 2025, the US took significant steps to close a loophole that had long benefited Chinese e-commerce giants like Shein and Temu. The de minimis exemption, which allowed small-value shipments from China—valued at US$800 or less—to enter the US tariff-free, was initially revoked on February 1, 2025, as part of the broader America First Trade Policy.

This shift marked a major change in how low-value goods from China are treated. However, the full implementation of this policy was paused shortly after, as the U.S. government acknowledged the need for better systems to process tariffs and ensure compliance. The exemption was temporarily retained until the required infrastructure could be established.

In the meantime, the White House continued to strengthen oversight of these shipments, aiming to improve compliance checks and reduce risks such as counterfeit goods and illicit substances entering the US.

On April 2, 2025, President Trump signed an executive order imposing a 34 percent across-the-board tariff on Chinese exports to the US and a 30 percent flat-rate tariff on small postal packages.

On April 9, these measures were further amended, and on April 10, the White House clarified that the cumulative tariff on Chinese goods, inclusive of previous and new measures, now amounts to 145 percent. This rate includes the newly imposed 125 percent reciprocal tariff and the earlier 20 percent base tariff, plus additional levies from the Trump and Biden administrations on key products like EVs, solar panels, semiconductors, steel, and aluminum.

For platforms like Shein and Temu, which process hundreds of thousands of orders daily, the cumulative effect of these per-unit charges is substantial.  A 145 percent duty on bulk shipments, combined with the elimination of duty-free postal packages and significantly higher small parcel duties, will drastically inflate retail prices. For a platform whose competitive edge lies in its affordability, even a 10 to 20 percent increase could alienate its core demographic—primarily Gen Z and millennial shoppers.

In this article, we explore the effects of Trump’s tariffs on China’s ultra-fast fashion market, how these changes are reshaping trade dynamics, and the challenges e-commerce platforms like Shein and Temu now face in this evolving landscape.

Trump’s tariff details and immediate implications

The de minimis exemption: A gateway for ultra-fast fashion

For years, ultra-fast fashion platforms—including Shein, Temu, and an increasing number of Chinese-based sellers on Amazon and TikTok Shop—leveraged the US de minimis exemption to flood the American market with low-cost, trend-driven products. This rule, codified under Section 321 of the US Tariff Act, allowed individual packages valued at US$800 or less to enter the country free of duties and inspections.

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This regulatory loophole dramatically reduced shipping and customs costs, giving ultra-fast fashion players a competitive edge. Instead of consolidating orders and paying bulk import duties, companies could ship thousands of individual parcels directly to consumers—many of which bypassed scrutiny entirely. According to analysts, nearly four million packages per day entered the US under this exemption in 2024, a significant share of them originating from Chinese e-commerce platforms.

The system, however, came under growing scrutiny. Critics argued that the exemption:

• Enabled unfair competition against US retailers;
• Was exploited for illicit trade, including fentanyl and counterfeit goods;
• Overwhelmed customs infrastructure, limiting the government’s ability to screen goods effectively.

In response, President Trump moved to revoke the de minimis exemption for Chinese-origin parcels as part of a broader effort to tighten trade policy. The change was first announced on February 1, 2025, but paused on February 7 due to disruptions in logistics and customs processing.

A new executive order issued on April 2, 2025, re-imposed the measure, with full enforcement beginning May 2, 2025. Under the revised framework:

• Parcels from mainland China and Hong Kong are now subject to a 30 percent ad valorem duty;
• A flat rate of US$25 per item applies from May 2 to May 31, increasing to US$50 per item starting June 1, 2025;
• The Secretary of Commerce is
•  reviewing whether to extend this restriction to Macao to prevent rerouting.

Following further escalation, a second executive order was signed on April 9, 2025, dramatically intensifying the pressure on China’s e-commerce ecosystem. The latest revisions now impose:

• An ad valorem duty of 120 percent on the declared value of each small parcel (up from the previously announced 90 percent);
• A flat fee of US$100 per item, increasing to US$200 starting June 1.

In addition, on April 10, the White House clarified that the cumulative tariff burden on Chinese goods now stands at 145 percent, when accounting for the new 125 percent reciprocal tariff imposed under Trump’s executive order, combined with earlier 20 percent duties and product-specific levies from both Trump and Biden administrations.

These measures effectively eliminate the low-cost structure that allowed Chinese platforms to thrive in the US market. What was once a seamless, tariff-free logistics model has now become a high-cost, compliance-intensive operation, putting enormous strain on the business models of platforms like Shein and Temu.

New tariff structure: Stacking costs on Chinese imports

Simultaneous to ending the de minimis exemption, the Trump administration unveiled a sweeping new tariff regime as part of its “Liberation Day” trade overhaul. The centerpiece of this strategy is a universal baseline tariff and country-specific surcharges—with China at the center of the storm.

Key elements of the new tariff structure include:

• A 10 percent tariff on all imports, excluding those from Canada and Mexico, effective April 5, 2025;
• A China-specific additional 34 percent tariff, layered on top of the existing 20 percent duty, resulting in a total import duty of 54 percent on bulk Chinese goods, effective April 9, 2025;
• Sector-specific tariffs of 25 percent on foreign cars, car parts, steel, and aluminum, effective April 3, 2025; and
• A new reciprocal tariff of 125 percent on all Chinese imports, announced April 9 and taking effect April 12, bringing the cumulative tariff burden to 145 percent when combined with existing duties and sector-specific measures. Notably, this 145 percent figure, clarified by the White House on April 10, represents a minimum applicable tariff and will be applied on top of any prior levies, including those under Section 301 and product-specific duties imposed by both Trump and Biden administrations.

The introduction of both universal and targeted tariffs signals a broader shift in US trade policy aimed at recalibrating trade balances and reviving domestic manufacturing. However, in practice, these layered duties significantly raise the cost of doing business for Chinese exporters—and for US firms and consumers reliant on low-cost imports.

Implications for China’s ultra-fast fashion sector

China’s ultra-fast fashion sector has built its model around high-frequency, low-value, cross-border shipments—most of which entered the US under the de minimis threshold. In 2023 alone, over 1 billion packages qualified for this exemption, with China accounting for more than 60 percent of those shipments.The new tariffs, including a 120 percent ad valorem duty on small packages or a flat per-item levy of US$100 (rising to US$200 from June 1), fundamentally alter the cost-benefit equation of this model.

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For platforms like Shein and Temu, which process hundreds of thousands of orders daily, the cumulative effect of these per-unit charges is substantial. For example, a US$5 T-shirt now faces a minimum of US$6 in import duties under the 120 percent ad valorem rate—or a flat US$100 charge—both of which can multiply the final retail price many times over. This disrupts the operational logic of micro-batch production and direct-to-consumer delivery, likely forcing companies to consolidate shipments, relocate distribution hubs to third countries, or even explore US-based warehousing—all of which erode delivery speed and cost efficiency.

Additionally, with the new 145 percent tariff on bulk imports from China now in effect, even traditional wholesale shipments face cost structures that may be unsustainable for fast fashion pricing models.

Price sensitivity and consumer behavior

Ultra-fast fashion thrives on volume and low prices: Shein’s average order value hovers around US$75, with individual items often priced below US$10. A 54 percent import duty on bulk shipments, combined with the elimination of duty-free postal packages, will significantly inflate retail prices. For a platform whose competitive edge lies in its affordability, even a 10 to 20 percent increase could alienate its core demographic—primarily Gen Z and millennial shoppers.

Meanwhile, US-based discount retailers and resale platforms like ThredUp or Poshmark may benefit as consumers look for alternatives within the low-cost segment.

Broader outlook and global repercussions

The introduction of sweeping tariffs by the Trump administration marks a pivotal turning point not only for US-China trade relations but for the global fashion industry at large. With duties now reaching up to 145 percent on Chinese goods, the implications stretch well beyond Shein and Temu.

What’s emerging is a dramatic reconfiguration of the international trade landscape, one that is forcing fashion brands, suppliers, and governments to reevaluate long-held assumptions about globalization, supply chains, and the cost of speed.

Beyond the US

While the US leads the charge, other countries are watching closely—or already acting. In the European Union, growing concerns around overproduction, environmental degradation, and the ethical implications of ultra-fast fashion have sparked calls for tougher import regulations, carbon tariffs, and digital platform accountability.

Singapore, often used as a transshipment point for Chinese goods, has begun reviewing its customs practices amid US pressure. Even Vietnam, which has positioned itself as a China alternative, now finds itself entangled in tariff wars it once hoped to avoid. Meanwhile, fashion companies operating globally are bracing for more unpredictable border regimes.

A fractured supply chain

The fashion supply chain is notoriously fragmented. A single product might source fabric from Italy, zippers from China, and be assembled in Bangladesh before heading to the US or EU market. This complexity now collides with an increasingly fractured trade environment. It’s not just that costs are rising—it’s that clarity around where and how tariffs are applied is breaking down.

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Even major players aren’t immune. LVMH, which operates factories in California and Texas, may avoid some tariffs on finished goods, but still imports raw materials from Europe and Asia. Meanwhile, sportswear brands like Nike and Adidas, who had shifted production to Vietnam and Cambodia during Trump’s first term to avoid China tariffs, now find those strategies collapsing under the weight of this new wave of duties.

The future of ultra-fast fashion

The long-term sustainability of China’s ultra-fast fashion model is now under intense scrutiny. Platforms that built their business on hyper-cheap, high-volume, direct-to-consumer shipments—often sent as individual parcels via air—face existential threats. The end of de minimis treatment, severely erodes the price advantage that allowed ultra-fast fashion to thrive.

In this environment:

• Small orders are no longer efficient;
• Air shipping loses cost competitiveness;
• Margins shrink or vanish altogether.

Consumers may start to feel the pinch. While the ultra-wealthy are likely to remain insulated, middle-income and aspirational shoppers—the backbone of fast fashion—are expected to face rising prices or reduced access. Some may turn to secondhand markets, low-cost alternatives, or even counterfeits, raising concerns about labor abuse and product safety.

And as economic anxiety rises, underconsumption trends—once a niche online movement—may become mainstream. Influencers are already embracing “low-buy” and “no-buy” challenges, thrift hauls, and capsule wardrobes. Whether this shift is temporary or marks the beginning of a cultural rethinking of fashion consumption remains to be seen.

Also read:

• US-China Relations in the Trump 2.0 Era: A Timeline
• Trump Raises Tariffs on China to 145% – Overview and Trade Implications
• China Ultra-Fast Fashion Sector: Growth, Challenges, and the Global Impact of the “Shein Effect”

This article was originally published on April 8, 2025, and last updated on April 10, 2025.

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