Photo by Adrian Sulyok on Unsplash
April 23, 2025
Can Amazon Haul Evade Tariffs To Outperform Temu and SHEIN?
Temu and SHEIN have established themselves as leaders in the ultra-low-cost online retail business, while upstart Amazon Haul has so far struggled to break the stranglehold that these entities — in tandem with TikTok Shop — have on the existing market.
But all of that could change in the near future, as Forbes contributor Kiri Masters detailed. With the de minimis exemption set to expire on May 2 as part of President Donald Trump’s trade policy changes, and coinciding with the aggressive tariffs placed on Chinese imports, Temu and SHEIN face substantial headwinds should that eventuality materialize.
“The Trump administration’s decision to end the de minimis exemption has sent shockwaves through the ultra-low-price shopping ecosystem. Starting May 2, packages from China valued at or under $800 shipped through the U.S. Postal Service will face a tariff equivalent to 120% of the goods’ value or a fee of $100 per package, increasing to $200 in June. Items shipped through carriers like UPS will face tariffs as high as 145% of the goods’ value,” Masters wrote.
Amazon (and by Extension, Amazon Haul) May Have a Leg Up on Temu, SHEIN Due to Established Fulfillment Practices
While Temu and SHEIN have both enjoyed significant year-over-year sales growth in late March and early April, results that analysts suggest are due to consumers looking to beat the imminent price increases announced by both retailers, that window appears to be closing.
When it does, Amazon Haul could have a substantial advantage in the ultra-low-cost retail space as the de minimis loophole slams shut and increased tariffs take hold. Unlike Temu and SHEIN, Amazon has pre-existing (and massive) stateside warehousing, packing, and distribution capabilities — whereas the former pair rely largely on direct-to-consumer shipments that must individually clear U.S. customs.
“This distinction could prove critical in navigating the new tariff reality. While the specific implementation details remain unclear, Amazon’s domestic fulfillment network potentially shields Haul from the most severe impacts of the de minimis policy changes,” Masters suggested.
“Products that have already been imported in bulk and stored in Amazon’s U.S. warehouses may face different, or at least more certain, tariff treatment than direct-to-consumer shipments where tariffs are calculated on an individual basis by U.S. Customs and Border Protection,” she added.
The success of the Fulfilled by Amazon (FBA) system could potentially unlock Amazon Haul’s potential, should Chinese retailers seeking to appeal to cash-strapped U.S. customers be hampered by protectionist trade policy.
Caveat: Trump’s On-Again, Off-Again Tariffs Concerning China Could Be Subject to Renegotiation
There’s one major “what if?” trailing this line of thinking, however: It appears that both the Trump administration and Chinese officials are signaling a return to the bargaining table.
According to an April 23 report from The Globe and Mail, representatives from both nations appear interested in some form of de-escalation of current trade tensions.
On April 22, U.S. Treasury Secretary Scott Bessent hinted at some form of economic rapprochement in the “very near future,” saying “neither side thinks the status quo is sustainable,” to an audience at a private investment conference in Washington. Trump was quick to reinforce Bessent’s remarks when asked about them later that day, suggesting that the current rate of Chinese tariffs would “come down substantially.”
The following day, Chinese Foreign Ministry spokesman Guo Jiakun also appeared to offer something of an olive branch.
“There are no winners in a tariff war or a trade war,” Guo said.
“China’s attitude is very clear. We do not want to fight, but nor are we afraid to. If forced to fight, we will do so to the end. When it comes to talks, our door is wide open,” he added.
Bessent went on to suggest that although negotiations with Beijing could be difficult, a de-escalation was likely. Trump differed in his follow-up comments only inasmuch as he thought a deal could be struck “pretty quickly,” adding that he would not “play hardball” at the bargaining table.
Discussion Questions
Can Amazon Haul evade, or mitigate, tariffs well enough to steal market share from a potentially disadvantaged Temu and SHEIN?
Should the de minimis loophole be closed and relatively daunting tariffs remain in place against China, will consumers abandon Temu and SHEIN en masse in favor of other ultra-low-cost retailers? Why or why not?
Given the recent talks of resolving the U.S.-China trade dispute, do you believe another reversal on tariffs and the de minimis exemption is forthcoming?
Poll
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Ananda Chakravarty
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Mark Ryski
Founder, CEO & Author, HeadCount Corporation
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CEO, New Sega Home
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To be pernickety, evading tariffs is illegal. What Amazon, and anyone else, can do is try to *avoid* tariffs by shifting supply chains and adjusting their business model. In the case of Amazon Haul, this involves switching the focus to selling goods in US warehouses. This works to an extent. However, prices will be higher than stuff directly sourced from China. If new inventory is brought over from China (even in bulk), it will still be subject to tariffs, and the products being supplied even from the US may have higher post-tariff prices as some of their input materials might be imported. Of course, these issues also impact Shein and Temu, so they don’t put Amazon Haul at any distinct disadvantage. That said, it further muddies the waters as to what the point of Haul is and how it really differs from the core Amazon marketplace.
“Evade” seems likethe wrong word here: it implies something illegal, or at least untoward, and while we expect nothing less from Amazon – just kidding!!! (sort of) – simply having a distribution network hardly seems underhanded. (Obviously one could argue atttacking the DTC model is wrong, whatever the motivations , but I can’t fault a competitor for being poised to take advantage of something they have little to do with).
And while the world is focusing most of its attention on tariffs – logically (but, I would argue, excessively) – removal of the exemption is what’s really going to kill foreign-based DTC: having to go thru the arduous step of customs inspection will be a mortal blow..even if the tariff is not 125% but 0.125%.
The elimination of the de minimis exception and current tariff policy regarding China are significant headwinds for Temu and SHEIN. Amazon (and most every other retailer) will feel the impact of tariffs, but Amazon does have advantages over these low-cost players. Even if the US administration works out a tariff deal with China, there’s still going to be tariffs. And the administration could easily change course, so the uncertainty will continue. The de minimis loophole, which has helped make Temu and SHEIN successful, is more problematic. Any way you slice it, Temu and SHEIN are going to feel these impacts given material percentage of business both firms do in the US.
No. We are not even close to the drivers seat in this stupid war. We will lose. And as Ken Griffith said, “the US’s brand will be tarnished” as a result of this nonsense. Apparently shortages will appear in 2 weeks or so (per Walmart, Target and Home Depot).
PS There is NOTHING to stop China from simply subsidizing production costs on their side and provide lower costs that offset the tariffs. I don’t know how many ways to say it. Oh, I know “We are holding lousy cards.”
I wouldn’t say nothing: presumably even China doesn’t want to lose all their money on daft ideas. The rate is key, of course: 10- or 20% might be doable, but 125%, or whatever the flavor-of-week becomes next, is ultimately ruinous.
What a self-inflicted mess. We’re wrecked our standing in the world, alienated allies, and unleashed the raw power of producer countries. We cannot win here.
Amazon may have a sliver of opportunity here, in that opposed to sites Temu and SHEIN, Amazon Haul can position as a place where customers/shoppers can easily see a filtered list of “tariff-minimized” products which are shipped quickly, at a lower price, or even made in the USA. A ‘filtered’ Haul list of products may not be long or highly competitive, but the idea of browsing quickly is appealing in that it saves customers time and hassle during this uncertainty. If anyone can position this right, its Amazon.
If U.S. tariffs on Chinese imports stay in place and the de minimis exemption expires, Amazon Haul could steal share from Temu and Shein. Temu and Shein ship directly to consumers and each individual parcel would incur tariffs and presumably longer delays to clear customs. In response, Amazon Haul can emphasize benefits like product quality, affordability, easy returns and faster shipping due to its robust U.S. logistics network.
To minimize the impact of tariffs, Amazon Haul could leverage its established logistics network and supply chain efficiencies.
It is also possible that customers seeking reliable alternatives to Temu and Shein may be attracted to Amazon’s extensive product selection and strong brand loyalty.
Amazon Haul may be able to capture a greater share of the market if it strategically adjusts its sourcing and pricing strategies.
A significant competitive advantage for Amazon can be attributed to its robust infrastructure and the ability to adapt quickly to market changes.
In contrast to smaller retailers, Amazon is able to absorb some of the tariff related costs and pass on savings to consumers as a result of its efficient supply chain. Further, its strong customer service and reliable delivery options may entice consumers to switch from Temu and SHEIN, particularly in the event that these brands have difficulty maintaining their low prices.
In the end, tariffs will not be a problem. There are more than 70 countries that have already waived their tariffs against the United States, and Trump will win the battle with China, and that is a promise.
The first question to ask is already in the article: “What if…?” We still don’t know how the final decision on tariffs between the US and China (and vice versa) will play out.
It would be in any company’s best interest to have an alternative supplier for at least a small percentage of merchandise. Establishing relationships, even if they are small, with other vendors and manufacturers in other countries can make a retailer more agile when tariffs or any other issues arise.
Sourcing will be the key issue, so while transferring through other countries, assembling in other states, or storing in other nations might work, blanket tariffs will still apply. SHEIN and Temu will have the same options as Amazon- because Amazon doesn’t make their goods here. More importantly, most goods offered will be coming from the same sources. If we exclude all of the sources for SHEIN and Temu, what we’ll see is a much tinier assortment, usually at a higher base price- that could selectively go up as well. Amazon might be able to match pricing, but most likely not beat it for any length of time. Low price is always a race to the bottom and becomes a war of attrition. This will drown all parties, and those with the most temerity will come out ahead- after a long difficult period of suffering.
Evading isn’t an option. Adapting is. This initiative may very likely be absorbed back into the mothership like other Amazon initiatives. Its reason for existence is much less valid now, and was really a distraction from the offset.
I still don’t understand how tariffs on DTC foreign purchases are handled. Where is the payment made, and how is it collected? Can anyone help me? And it doesn’t affect DTC ships from only China, but from other countries as well.
It will, in theory, even affect something like eBay ( IIRC you’re supposed to give the seller your phone number so USCBP can call you); think about it: tens – hundreds? – of millions of games of phone tag for $5 used Matchbox cars!
If the item is sent to a shopper then the shopper needs to pay the tariff. The item will enter customs and the shipping company will have to pay to release it. Most shipping companies ask customers to pay this fee before releasing the item. However, how this will work for millions of packages coming in is anyone’s guess. I don’t think anything has been planned and there are likely to be huge backlogs – which is another issue.
This is one of the reasons DHL has already suspended some shipments to the US.
Move
fastslow and break things!The policy is like a cat playing with a big ball of yarn. At first it becomes messy, then it gets more and more tangled, then it wraps itself around the cat. The cat continues to play. The yarn becomes tighter. The cat eventually becomes completely stuck and the knotted yarn is useless. The cat can no longer play. And new yarn costs $200 because of tariffs – though if you hurry you might get a discounted ball at the Joann closing sale!
Personally, it’s more like playing “quarters”: my company – a smallish ($20M/year) steel importer – just missed the mark this month with its “Freedom Day” levy: $236,685.07 .
Geez! 🙁
Thank you, gentleman. As you explained, that’s how I expected it to work…except I couldn’t figure out the collection of tariffs on millions of packages sent directly to homes and businesses. Apparently, not much thought has gone into that.
It’s very difficult for any business today to build a strategy based on the actions of the US governement. The Administration has blinked a number of times already in their tariff war. They’re on, they’re off… Bottom line there doesn’t seem to be a plan or any rhyme or reason to the presidents policies.
For Amazon, like everyone, navigating chaos is the worst posisble scenrio for sustainable business. As others have pointed out here, evading tariffs isn’t a thing, it’s illegal. Which means Amazon needs to be strategic about doing what they can to stabilize their supply chain, especially on high demand items.