Tip Sheets
Low-cost retailers facing price hikes with expiration of de minimis clause
August 25, 2025
Media Contact
Adam Allington
Prices on low-cost imported goods could be going up soon, as a trade loophole allowing many retailers to avoid President Trump’s tariff hikes is set to expire this Friday. The exception for all nations, called the “de minimis trade agreement” applied to items shipped to the U.S. and valued at $800 or less.
Li Chen
Professor of Manufacturing Management
Li Chen is a professor of manufacturing management at Cornell’s SC Johnson College of Business, where he’s studied supply chains of low-cost retailers such as Shein and Temu.
Chen says:
“Yes, Shein’s retail prices will take a hit by the elimination of the de minimis exemption, but not to the extent of turning U.S. shoppers away from the app. The new prices will still be good bargains compared to what U.S. shoppers can get elsewhere (except for from Temu, of course). It is still a good bargain, just not as deeply discounted as before.
“The fierce competition between Shein and Temu may also serve as a price cushion for U.S. shoppers. Both would be reluctant to increase their prices to fully adjusted for tariffs, in fear of losing market share to their counterpart.
“Shein is also well diversified in their market dependence—they aren’t just selling to the U.S. market; other markets such as EU and Mideast have taken up more revenue shares in recent years. As a result, Shein has more leeway in optimizing how much tariffs to pass on to customers and how much to absorb by itself.”
