Will SHEIN and Temu's Incoming Price Increases Due to Tariffs Result in Diminished Sales Growth?

Fast-fashion retailer SHEIN and its low-cost competitor Temu are both in the crosshairs as President Donald Trump's escalating tit-for-tat tariff war with China — and off-again, now-on-again closure of the de minimis loophole, set once more for May 2 — threaten the core of their business models.

According to Forbes contributor Mark Faithfull, Temu and SHEIN face significant and imminent pressure from these dual headwinds.

"Both companies will be hit by the new import levies, which will mean taxes of up to 145% being applied to Chinese products, and specifically they will also be impacted by President Trump’s cancellation of the so-called ‘de minimis’ exemption," Faithfull began.

"Under that rule, shipments worth less than $800 could be imported duty-free, and this loophole was crucial in enabling both to send low-cost online purchases direct to the customer without incurring additional levies. It will be removed from May 2," he added.

And price increases certainly seem to be on the horizon for both Chinese e-tailers, according to very similar press releases put forth by Temu and SHEIN.

"Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025. Until April 25, prices will stay the same, so you can shop now at today’s rates. We stand ready to make sure your orders arrive smoothly during this time. We’re doing everything we can to keep prices low and minimize the impact on you," a SHEIN customer notice stated.

Temu echoed this sentiment, per CBC.

"We've stocked up and stand ready to make sure your orders arrive smoothly during this time," Temu's statement read. "We're doing everything we can to keep prices low and minimize the impact on you."

Temu and SHEIN Saw Massive Growth in March and April but Are Now Slashing US Ad Spend Over Tariffs

Attributing a massive rush by U.S. consumers to beat the clock on tariffs, Forbes (quoting Bloomberg Second Measure data) outlined that SHEIN had experienced a massive 29% jump in revenue for March on a year-over-year basis — an upswing that only further advanced to 38% in the beginning of April.

Temu saw much of the same, although its numbers were even more impressive. Regarding March, Temu increased revenue by 46% versus the year prior's figures, and for early April, that number skyrocketed to 60%.

At the same time, both retailers decided to dial back their U.S. social media ad spend. Citing data from Sensor Tower targeting the two weeks spanning the end of March through April 13 as compared with the prior 30 days, Forbes indicated that SHEIN had curtailed its American social media ad spend by 19%. Temu, however, cut even deeper, slashing its ad spend by 31%.