Chinese Communist Party’s E-Commerce Gang Shein, Temu Take a Hit

The trade de minimus rule ends May 2 for Shein, Temu and the Chinese E-Commerce gang’s discount retail onslaught.

It’s not just tech.  Cheap retail and e-commerce are also weapons of choice for the Chinese Communist Party’s ongoing assault on America’s technology.  You know the pitch: trendy tops, dresses, and housewares from Shein, Cupshe, Temu, and others that were selling online for $5 to $15 with fast delivery direct from China to evade tariffs. 

No more.  President Donald J. Trump shut the door on China’s exploits by issuing an Executive Order ending de minimis shipments from China and Hong Kong starting in May.  Their polyester weapon is going down.

While fast fashion may seem harmless, the exemption disproportionately benefitted Chinese e-commerce.  Long story short, here is the Chinese Communist Party getting into retail and going after yet another sector of the American economy via price undercutting.  

As it turns out, China was dodging import duties by keeping shipments small and mailing them directly via their own e-commerce platforms.  This old exemption was originally intended to allow American tourists shipping home souvenirs to skip customs if the value of their package was under $200. Congress raised the limit to $800 in 2016, and wham.  The rising popularity of mobile phone ordering accelerated sales for the Chinese e-commerce gang.  Clothier Shein and gadget purveyor Temu seized outsize U.S. market share in just a few years, thanks to the insane discount pricing enabled by the de minimis rule.  By 2025, four million de minimis shipments from China entered the U.S. every day.

The problem of cheap Chinese retail is hitting hard at American small businesses, e-commerce leaders, and local discount chains alike. 

For example, Chinese e-commerce vendor Shein entered the U.S. market with $1.5 billion in sales in 2019 and targeted $50 billion for 2025.  However, Shein, Temu, and that ilk would never have grabbed market share without the de minimis loophole.  “A three-pack” of “solid cami top and shorts PJ sets” retailing for $10.84 raises the question: How is Shein able to produce and sell three items for less than the cost (not the price) of one item produced by its competitors?” wondered the Harvard Business Review in a 2024 review of Shein.   Mall retail stalwarts like Express pondered brand awareness to raise sales, but in fact, the whole context of shopping was changing due to the undercurrents of Chinese e-commerce. 

A lace t-shirt at Shein might sell for $6.61, while at Old Navy, women pay $24.99 or $15 on sale.  Both may be made in China, but American-owned Gap Inc. pays duties on its bulk imports.  Likewise, manufacturers that send their imports to warehouses for resale on Amazon, for example, pay regular tariffs.  “Shein and Temu mostly ship directly from their Chinese suppliers to your doorstep here in the U.S., and that’s duty-free,” Alina Selyukh told NPR.  Forbes calculated that the US represented about a third of Shein’s sales and dominated the e-commerce fashion market in the US, “having blown past Amazon and Walmart.”

Likewise, Temu launched in 2022 and hit 185 million U.S. users in 2025.  By December 2023, Temu reached a 17% share of the U.S. discount retail market, competing directly with Dollar Tree at 28% and Five Below at 8%.  Dollar General (which stocks groceries) still held the lead at 43% of the discount retail market.  However, Dollar Tree cited the e-commerce impact of Temu and Shein as part of a major restructuring. While many other factors are creating turmoil in U.S. retail, it’s beginning to look like the entry of the Chinese Communist Party has taken its toll. 

On May 2, packages will pay 30% of value or a flat $25 dollar fee, rising to $59 on June 1.  Already, Shein and Temu are both raising prices. In 2023, the U.S. House Permanent Select Committee on China also found others emulating Shein’s business model and expanding their U.S. presence, including Cider, Urbanic, ChicV, Doublefs, Cupshe, and JollyChic.

The competition was never fair.  Note Shein does not sell to the Chinese; it is export-only.  In contrast, Amazon closed its Chinese marketplace in 2019 due to regulations, censorship, and cybersecurity barriers. 

Mexico has felt the sting, too, with an estimated 80,000 textile jobs lost.  Mexico has no trade agreement with China and recently imposed a 19% tariff.  “You can’t compete with countries that have more production capacity than they can place in the world, and that are willing to give away those products,” Mexican Ministry of Economy official Vidal Llerenas said earlier this year.

Fast fashion has already been weaponized against China’s Uighur Muslim minority.  The prestigious Council on Foreign Relations reported that over 1 million Uighurs have been detained in re-education camps since 2017.  In January 2025, Shein’s lawyers could not certify to Britain’s Parliament that their products were free of cotton produced by forced labor from Xinjiang.

Watch out for product safety with some Chinese e-commerce products.  Health Canada tested a Shein jacket for toddlers and found it contained 20 times the amount of lead considered safe for children.    On January 7, ABC News reported an eight-year-old girl in Australia had suffered severe burns to 13 percent of her body after her Temu sweater caught fire “in a split second” when a wind gust reportedly blew embers onto her glow-in-the-dark garment.  “Australian shoppers should pause before buying from Temu,” concluded Elle Australia. 

Good advice for all.  The last thing America needs is Chinese e-commerce bruising local retail.