New U.S. trade measures targeting Chinese imports are worsening conditions for fast-fashion e-commerce platforms like Shein and Temu. In early May 2025, the Biden administration ended the “de minimis” tariff exemption that previously allowed low‑value imports under $800 to enter the country duty-free—a move that deepened the blow initiated under the Trump-era tariffs.

Temu has been hit especially hard: daily U.S. users dropped 48% from March to May, forcing the company to slash ad spending and pivot toward local warehousing to reduce costs. Analysts warn that Temu’s U.S. competitive edge continues to diminish, even as it shifts focus to less affluent markets where 90% of its 405 million global monthly users reside.

Shein, while also affected, has managed a more resilient response. Despite a 20–50% drop in U.S. orders in March and rising costs due to tariffs, it has increased spending per customer and diversified its manufacturing footprint to countries like Vietnam, Brazil, and Turkey. Yet, its low-price model is under strain: tariffs up to 150% on Chinese apparel risk forcing price hikes and prompting consumers to shift to alternatives like Amazon and slow-fashion brands.

The shifts triggered by these tariff reversals may mark a turning point in fast fashion. Observers suggest the policy’s ripple effects could ultimately benefit domestic and sustainable fashion players by leveling the playing field.