Is the end of de minimus the end of Shein and Temu's US reign?

President Trump’s elimination of the de minimis exemption, which previously allowed tax-free imports of certain goods under $800, is officially in effect. While the change impacts many companies,two major fashion retailers are bearing the brunt of it already.

And yes, we do mean Shein and Temu.

According to CNBC, Temu’s daily active users in the US were down 52% last month compared to March, while Shein reported a 25% drop. Both retailers also pulled back on US advertising spend, which contributed to a dip in popularity among shoppers.

While we don’t necessarily hear hearts breaking over the news, it does raise questions about their future in the US. Is it the end of China-brokered ultra fast-fashion retail in the US? Well, it doesn’t have to be, experts say.

“Industries most affected include apparel and fast fashion, consumer electronics, health and beauty, and home goods—sectors that rely heavily on low-cost, cross-border shipping,” Korhan Acar, partner in the strategic operations practice of Kearney, told Retail Brew via email, adding that while e-comm marketplaces such as Amazon can help third-party sellers pivot to domestic fulfillment, companies like Shein are “already transitioning to local seller networks, while others, like Temu, have paused direct shipments to the US.”

He also pointed out that some companies were already consolidating shipments by expanding regional warehousing and moving to US-based fulfillment models.

“Freight forwarding and 3PL services are seeing increased demand, while express air cargo volumes soften and bulk freight rises,” he said. “Shippers are also turning to long-term contracts to manage cost volatility.”

While these solutions could come in handy for companies like Shein and Temu in the short term, with the tax exemption out the proverbial American window, long-run profits will likely still be impacted, Kenneth Cochran, managing director in the consumer and retail group of Alvarez & Marsal, told Retail Brew.

“The general understanding is that companies like Temu and Shein have been positioning for this for a few years,” Cochran said. “A great deal of commercial warehousing deals over the past two years have involved Chinese logistics deals near the ports. Companies like this will position some inventory in the US but will also continue to ship from Asia, deploying creative solutions to avoid the de minimis impact.”