The Journal.

A Tariff Loophole Just Closed. What That Means for Online Shopping.

May 2, 2025

A significant trade provision is ending, set to impact e-commerce and consumer prices drastically. The removal of the de minimis exemption means online retailers could face hefty duties, potentially raising costs for shoppers. Major players like Shein and Temu are adapting to this shift while grappling with stricter customs regulations. Moreover, small retailers, including a shoe company, may face existential challenges as they reassess their pricing strategies and manufacturing operations amidst the evolving tariff landscape.

18:38

AI Summary

AI Chapters

Episode notes

Podcast summary created with Snipd AI

Quick takeaways

The closing of the de minimis trade provision will raise costs for consumers and disrupt pricing strategies for e-commerce giants like Shein and Temu.

E-commerce companies are adapting by raising prices and shifting sourcing to mitigate the financial impacts of the new tariff rules.

Deep dives

Impact of Tariffs on Online Shopping

The trade war with China, particularly President Trump's high tariffs averaging 165%, has led to increased prices for online shoppers on platforms like Shein and Temu. Consumers are experiencing notable price jumps, such as an import charge of $27 on an $18 order from Temu, exemplifying the financial burden imposed by these tariffs. This critical shift is reshaping the online shopping landscape, prompting consumers to pay significantly more for goods previously more affordable. As a result, companies like Shein and Temu, known for their low-cost direct-to-consumer models, are facing a challenging new reality.

Intro

1min

The Impact of Eliminating the De Minimis Exemption on E-Commerce

2min

De Minimis Dilemma: Tariffs and E-Commerce

6min

The Impact of Tariff Changes on Small Retailers

4min

Navigating Manufacturing Challenges Amidst Tariff Uncertainty

3min

A little-known trade provision is ending, and it will likely upend business for e-commerce companies and raise prices for consumers. De minimis has allowed companies to avoid duties on shipments to the U.S. that are worth $800 or less. It’s a program that many companies, especially e-commerce giants, Shein and Temu, have taken advantage of to keep prices low. WSJ’s Shen Lu explains how President Donald Trump has now ended that program for products from China and Hong Kong. We also speak with the CFO of shoe company Kuru about how the new rules could change their business. Jessica Mendoza hosts.

Further Listening:

-Shein: Fast Fashion, Slow IPO

-The Billionaire Caught Between Trump and China

-China Unleashes a Trade War Arsenal

Learn more about your ad choices. Visit megaphone.fm/adchoices