The de minimis loophole is expected to close on May 2, meaning prices will rise for people shopping at places like Temu and Shein.
In 2018, the average American bought 68 items of clothing. And this was before the rise of Shein and Temu, Chinese-based merchandisers that sell consumers trendy fast fashion items and home products for low prices.
Now, it’s easier than ever for consumers to buy a butter yellow dress, knockoff Crocs or anything else that might be trending on TikTok.
But a change to tariff fees may change the price of these clothes and the way Americans buy them. President Donald Trump signed an executive order to end the de minimis exemption, which exempted packages from China or Hong Kong valued at or under $800 from tariffs.
@northeasternglobalnews Tariffs will change the price of fast fashion after May 2nd. Here’s what you need to know. #Tariffs #Trump #Economy #Pricing #Shein #Temu ♬ original sound – NGN
Tariffs will change the price of fast fashion after May 2nd. Here’s what you need to know. #Tariffs #Trump #Economy #Pricing #Shein #Temu
“In the last few years, newcomers like Shein and Temu tried to disrupt the marketplace by offering low-cost products, often with allegations of social responsibility issues, including forced labor … and dumping them into U.S. markets,” said Shawn Bhimani, an assistant professor of supply chain and information management at Northeastern University. “Expectations are that consumer demand will decrease as prices increase, which means that fewer products will be bought. This also means that those buying products might end up paying more.”
These items will instead be subject to a duty rate of 30% of their value or $25 per item. The loophole will close as of May 2.
The de minimis exemption is responsible for a lot of shipments into the United States. Over a billion packages qualified for it in 2024, a number that has gone up tenfold over the last decade, said Kate Ashley, an associate teaching professor of supply chain and information management at Northeastern University.
The closing of this loophole will impact brands like Shein and Temu because they ship directly from overseas to the consumer and are selling a high volume of products that qualify for this exemption.
In contrast, American-based brands that manufacture their clothing in China or Hong Kong are bringing clothes over here in larger shipments that don’t meet the de minimis exemption. Ashley said they will also be impacted by tariffs and prices are likely to rise, but consumers won’t see it the same way they will with purchases coming directly from overseas.
“We will see a really immediate effect on that type of purchase,” Ashley said of products from brands like Shein and Temu. “It will no longer be an easy impulse buy to get that $5 shirt. Consumers will certainly feel the difference of the tariffs from this de minimis loophole closing.”
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Even longer term, the rises in prices might prompt people to buy less and stop purchasing from fast fashion brands in exchange for buying fewer clothing items of better quality as people did in the first half of the 20th century.
“Even 100, 150 years ago, we were very careful with our clothing,” said Frances McSherry, a theater costume designer and teaching professor who developed the Global Fashion Studies minor at Northeastern. “We took great care with it. We didn’t throw it away. We passed it on. Fabric was expensive. Labor was expensive. We didn’t imagine (clothing) as something we would consume rapidly and then dispose of rapidly.”
McSherry, who specializes in fashion history and theory, said this mindset shifted in around the 1960s and ’70s and began to ramp up throughout the next few decades as manufacturing jobs shifted overseas and clothing costs began to drop. By the 2000s, buying more clothes because one could afford them started to be the norm, and it became less common to learn the skills needed to repair clothing.
“It became a common practice to consume and then discard without caring about what happened to those clothes,” McSherry said. “In a strange sort of way, we’re separated a bit from our clothing.”
But while clothing has become less expensive, the quality has also declined as many manufacturers cut costs by using less durable material. As a result, people are wearing their clothing less because it doesn’t last as long, McSherry said.
Over the last decade, people have become more aware of this. McSherry said she’s seen a shift as students become more mindful about the environmental impact of overconsumption and more of them are opting to shop secondhand.
While the closing of the de minimis loophole is being done for political reasons, McSherry said it could encourage more people to cut back on what they’re buying and opt to shop local or secondhand.
“I think it’s generally a good thing,” she said. “Over the last 30 years, we have become so accustomed to the availability of clothing and the disposability of clothing that we haven’t really considered that in terms of the environment. … I’m hoping what it will do is help us to pause (and) understand that overconsumption, over-manufacturing, and excessive purchasing has been had for us in a whole lot of different ways and that we need to rethink this process.”