US Imposes Tariffs on T-Shirts and Earrings Under $800... Direct Hit to Temu and Syuin

Abolition of the 'De Minimis' Exemption for Small-Value Goods
Emergency for Amazon Rivals Temu and Shein
6-8% Decline in U.S. After-Hours Trading

There are projections that Chinese e-commerce companies such as Temu and Shein will be impacted due to the executive order by U.S. President Donald Trump pushing for broad tariff policies. Until now, tariffs were exempted on small-value goods under $800, but this exemption is being abolished to close the loophole.

On the 2nd (local time), Bloomberg reported, "President Trump signed an executive order imposing a 25% tariff on Canada and Mexico and a 10% tariff on China, explicitly stating that the ‘de minimis’ exemption rule, which applied to small-value goods, is no longer valid." However, the exact scope of application of this measure has not been disclosed.

U.S. consumers purchasing directly from China have benefited from the de minimis rule, which exempts tariffs on goods under $800. This has been one of the institutional factors enabling Chinese e-commerce companies such as Alibaba, the traditional powerhouse, Temu with its ultra-low price strategy, and fashion-specialized mall Shein to sustain their growth. The U.S. Wall Street Journal (WSJ) identified Temu and Shein as the biggest competitors to Amazon, the number one U.S. e-commerce company last year. Temu is estimated to have over 50 million users in the U.S. alone.

Bloomberg predicted that if President Trump proceeds with the tariff measures, Alibaba, Temu, and Shein will inevitably suffer damage. According to researchers from the University of California, Los Angeles (UCLA) led by Pablo Fajhelbaum and Yale University, clothing, accessories, household goods, electronics, and small durable goods sold by Shein and Temu are estimated to account for 30% of shipments under the de minimis shipping method.

With risk asset investment sentiment shrinking amid President Trump’s comprehensive tariff policies, stocks of Chinese companies are expected to fluctuate significantly for the time being. Alibaba Group Holdings, traded on the New York Stock Exchange as an American Depositary Receipt (ADR), recorded $95.6, down 6.95% as of 10 a.m. on the 3rd (Korean time). It is estimated that the price dropped due to a flood of sell orders in after-hours trading. Pinduoduo, the parent company of Temu, recorded an 8.84% decline on Nasdaq.