Shein’s US Momentum stalls as De Minimis tariff exemption ends

Ultra fast fashion retailer Shein’s meteoric growth in the US has suffered a sharp deceleration following the Trump administration’s decision to rescind the so-called de minimis tariff exemption on August 29. According to Bloomberg’s Second Measure transactional data, observed US sales for Shein fell by about 8 per cent year-on-year in September, its second-worst monthly performance in the past three years.

The de minimis rule had allowed imported packages valued at up to 800 dollars to enter the United States duty-free, a regulatory loophole that Shein and other direct-to-consumer platforms had leveraged vigorously to maintain ultra-low pricing and fast delivery. With its removal, Shein’s cost advantage has been eroded, narrowing the price gap with traditional fast fashion competitors in the US.

Already earlier in 2025, the company registered steep drops in US performance: during the week of April 25–May 1, sales plunged by 23 per cent compared to the prior seven days following pre-emptive price increases, according to Bloomberg. In subsequent weeks, declines of 15 per cent year-on-year were observed for comparable periods.

Analysts say that with the tariff barrier reimposed, Shein’s business model. built on low margins, trend agility, and tight logistical control, confronts fresh headwinds. “The playing field has been levelled,” observes Poonam Goyal, a retail e-commerce analyst at Bloomberg Intelligence. As Shein’s pricing becomes less advantaged, its ability to undercut incumbents diminishes.

The policy shift is also a vindication of Washington’s rationale: levelling the competitive landscape for domestic retailers. But for Shein, already preparing for a London listing, the timing could not have been more challenging.

To adapt, Shein has begun recalibrating its supply chain and market strategy. It has expanded warehousing in the US, diversified manufacturing beyond China (into markets such as Turkey and Brazil), and launched a platform initiative dubbed “Xcelerator,” which invites brands to leverage its manufacturing and logistics networks in exchange for access to its marketplace infrastructure, said eMarketing.

Nonetheless, the September slide signals that the era of unfettered growth in the US may be behind it. For Shein, the question now is whether it can maintain relevance in one of its key markets under a tariff regime that forces higher costs and slimmer margins.