Online fashion retailer Shein reported a quarterly loss of $99 million (£74.1 million) following the removal of an import duty exemption on small packages by former US President Donald Trump. The exemption, known as the “de minimis” tax rule, allowed duty-free entry of imports valued under $800 into the US until it was discontinued last year.
As a result of the policy change, all commercial shipments are now subject to standard customs duties and tariffs, irrespective of their worth. Companies like Shein, which relied on the “de minimis” rules to distribute low-value items from China, have been impacted.
Shein stated that the elimination of the US de minimis exemption adversely affected its sales in the US and overall revenue growth since May 2025. However, it noted a gradual return to normal consumer purchasing behavior and sales trends in the US.
In comparison to the previous year’s profit of $395 million (£296 million), Shein recorded a loss in the latest quarter. Despite this, its sales increased by 1.1% to $9.05 billion (£6.78 billion). The first-quarter loss also included a $328 million (£246 million) charge from an accounting adjustment for special investor shares, as Shein prepares for its upcoming stock market debut in Hong Kong.
In the UK, overseas retailers can ship small parcels valued below £135 without incurring import duties. The UK government has accelerated plans to close this loophole by shifting the deadline from 2029 to October 2028. Similarly, the EU has implemented a temporary €3 customs duty per item on low-value goods up to €150, effective until July 2028, after which regular customs duties will be enforced.
Shein expressed concerns that the EU’s removal of the small parcel exemption could significantly impact its business, financial status, and operational results. The company anticipated that the EU’s situation might mirror or exceed the effects witnessed in the US post the elimination of the de minimis exemption.
To counteract the sales decline, Shein is contemplating raising prices in the US and Europe to offset the increased costs due to higher duties and taxes. The company is exploring various options to mitigate the financial impact and maintain its market competitiveness.