Temporary Tariff Reduction Shakes Up US-China E-commerce Dynamics

A recent agreement between the U.S. and China temporarily reduces tariffs, offering online retailers like Shein and Temu a strategic period to adjust their models. Despite not reinstating the de minimis duty exemption, the move is seen as a key opportunity for these companies.

Previously, the de minimis policy allowed packages worth less than $800 from China to enter the U.S. duty-free, facilitating the rise of Temu and Shein. The elimination of this policy exposed these shipments to high tariffs, prompting the companies to redirect efforts toward Europe and reconsider their strategies.

With the 90-day tariff reprieve, Shein and Temu can restock inventories more cost-effectively. While their business models may evolve, opinions vary on whether these changes will accommodate the pricing structures that once fueled their swift growth.

(With inputs from agencies.)