Trump tariffs prompt price hikes and ad cutbacks from Shein and Temu
Department of Research, Studies and International News 17-04-2025
Starting next week, American shoppers will see higher prices on goods from Chinese fashion giants Temu and Shein, following newly implemented U.S. tariffs introduced by former President Donald Trump. The two retailers have announced adjustments in response to elevated import duties and the repeal of a crucial customs exemption.
The increased levies, effective May 2, 2025, will impose tariffs of up to 145% on Chinese imports. Additionally, the removal of the “de minimis” rule, which previously allowed duty-free entry for packages valued under $800, will significantly raise the operational costs for both retailers. This exemption had been instrumental in enabling low-cost, direct-to-consumer sales that fueled their rapid growth in the U.S. market.
In a message to customers, Shein explained that “operating expenses have increased due to recent changes in global trade policies and tariffs,” and stated it would adjust pricing beginning April 25, 2025. The company emphasized efforts to keep prices as low as possible without compromising quality.
Trump’s revised tariff strategy has escalated tensions with China. Initial proposals aimed to apply a 30% rate or $25 per item to previously exempt shipments, increasing to $50 by June 1. However, after retaliatory actions from Beijing, Trump responded by tripling the rates, to 90% or $75 per item, eventually rising to $150.
Despite the upcoming cost hikes, analysts suggest that Shein and Temu’s offerings may still remain competitively priced when compared to traditional retailers. However, the tariffs have led to another significant shift: both companies are scaling back their marketing efforts across U.S. social media platforms.
According to data from Sensor Tower, Temu reduced its average daily advertising spend across platforms like Facebook, TikTok, Instagram, and YouTube by 31% between March 31 and April 13, compared to the preceding 30 days. Similarly, Shein’s daily ad budget across Facebook, YouTube, Pinterest, and other platforms dropped by 19% during the same period.
Mark Ballard, digital marketing research director at Tinuiti, noted a notable decline in Temu’s presence on Google Shopping since April 12.
While Meta chose not to comment on the developments, Google, Shein, and Temu have not yet issued official statements regarding the changes.
As tariffs tighten and marketing budgets shrink, it remains to be seen how these moves will impact consumer behavior and the fast fashion landscape in the U.S.
