Source: SOPA Images / Getty
Cheap Chinese clothing could become more expensive due to President Trump’s new tariffs, potentially giving Amazon an edge over foreign competition.
On Tuesday, a new 10% tariff on all Chinese goods took effect, coinciding with President Trump’s decision to temporarily pause tariffs on Mexico and Canada for 30 days.
Along with the tariff, Trump’s executive order also suspended a little-known customs exemption, which allowed goods worth under $800 to enter the U.S. without duty. This change disrupts the business models of Chinese-based retailers like Shein and Temu, which had previously benefited from the exemption, avoiding both tariffs and customs inspections.
The new rule is also likely to cause delivery delays as packages now need to go through customs. Juozas Kaziukenas, founder of the e-commerce intelligence firm Marketplace Pulse, told the Associated Press that this would affect shipping times.
Some shoppers have already been reporting receiving emails about fees to receive their items.
The customs exemption had allowed Chinese e-commerce giants to keep prices low, attracting young American consumers with trendy clothes at very affordable prices. These companies ship directly to consumers, competing with U.S. retailers like Amazon, which launched its own version of Temu and Shein last year, called Amazon Haul. Available exclusively on the Amazon app, Amazon Haul features products shipped from China priced under $10, similar to those sold by Shein and Temu.
How much will prices rise? With Shein and Temu now subject to tariffs and the new 10% fee imposed by Trump, along with potential customs taxes, the extra costs are likely to be passed onto consumers.
While price increases may be modest, the shipping delays caused by customs inspections could deter some shoppers.
“If the tariffs remain, we could see higher prices on electronics, clothing, and other goods,” said Ryan Young, senior economist at the Competitive Enterprise Institute, a group that advocates for less regulation. “The delays will frustrate shoppers, and this could hurt the business models of low-cost vendors like Temu, Shein, and others.”
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