Trouble for Shein, Temu as Trump taxes small parcels, some retailers give up on US
As the United States ends a tariff exemption for small parcels on Friday, some retailers have stopped selling to US customers while others are seeking temporary workarounds in the hope the tariff rate may be reduced. The removal of "de minimis" - duty-free treatment of ecommerce packages worth less than $800 - for products originating from China and Hong Kong exposes those goods to tariffs of 145% on most Chinese goods following US President Donald Trump's decision last month, a move that upended global trade and triggered retaliation from Beijing.
British beauty products retailer Space NK has paused e-commerce orders and shipping to the US "to avoid incorrect or additional costs being applied to our customers' orders", the company said in a notice on Wednesday.
It is not alone. Understance, a Vancouver-based company that sells bras and underwear manufactured in China, told customers in an Instagram post that it would no longer ship to the United States due to the tariffs, saying it will resume once there is clarity.
"We're going from zero to 145%, which is really untenable for companies and untenable for customers," said Cindy Allen, CEO of Trade Force Multiplier, a global trade consultancy.
"I've seen a lot of small to medium-sized businesses just choose to exit the market altogether," she added. Import charges can vary depending on shipment methods. For goods handled by the US Postal Service, the tariff will be 120% of their value, or $100 per package. The amount is due to increase to $200 in June, according to implementation guidance from US Customs and Border Protection.
Players willing to continue to access the US market are forced to hike their price tags.
Oh Polly, a British clothing retailer, has increased prices in the US by 20% compared to its other markets, and may have to consider further price increases because of the higher tariffs, said managing director Mike Branney. Singapore-based fast-fashion giant Shein sought to reassure customers in a post on its US. Instagram account on Thursday, saying: "Some products may be priced differently than before, but the majority of our collections remain as affordable as ever." Shein sells clothes mostly manufactured in China, and the US is its biggest market.
Temu, the international arm of Chinese ecommerce giant PDD Holdings, prominently featured products already in US warehouses on its website, labelled 'Local', and a pop-up informed customers there would be no import charges for local warehouse items. But items imported before the May 2 change will eventually run out. Both Shein and Temu have slashed their US digital advertising spending in the past weeks as they prepared for the change that is likely to hit their sales.
Shein did not immediately reply to a request for comment. Temu did not immediately reply to a request for comment. De minimis was initially introduced to smooth online shopping and boost international trade, but became the target of bipartisan criticism due to its role in facilitating smuggling of fentanyl ingredients from China and fuelling a surge in imports of cheap clothes, toys, and furniture made in China through online platforms like Temu, Shein, and Amazon Haul.
De minimis has also been a channel for counterfeit goods. In 2024, de minimis shipments accounted for 97% of the intellectual property infringement-related cargo seizures made by Customs and Border Protection.
Without de minimis, sellers of goods made in China have to provide US customs with more detailed information about where each component of their product is made, an increased administrative burden that, along with the huge tariff cost, is dissuading small retailers.
UPS CEO Carol Tome said on Tuesday that many of the delivery firm's small to medium-sized business customers source 100% of their goods from China.
US online marketplace Etsy said in a notice to sellers earlier this month that it was making it easier for them to clarify the country of origin of their products, as tariffs are applied based on where a good is made rather than where it is dispatched from.
While disruptive to ecommerce, the end of de minimis treatment of Chinese goods could give a boost to retailers less reliant on ecommerce or on Chinese manufacturing. British fast-fashion retailer Primark, which sells clothes to US customers only through its stores across the country, not online, said it could benefit from the change.
"With prices going up from this part of the trade, I wonder if some Americans might start going back to shopping centres to find value there," George Weston, CEO of Primark owner Associated British Foods, told Reuters on Tuesday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
11 minutes ago
- Yahoo
Data breach involving Cycle & Carriage Singapore customer details under probe
SINGAPORE - The authorities are investigating a data breach in which hackers are believed to have accessed details of customers of motoring giant Cycle & Carriage Singapore (C&C). In response to queries, the Personal Data Protection Commission (PDPC) said it is aware of the data breach and investigations are ongoing. C&C, in a note sent to affected customers on July 31, said it is still investigating the full scope of the breach. It is unclear how many customers were affected. The note said: 'We were alerted on 14 July 2025 to the unauthorised access into our customer relationship management system, and the threat actor downloaded some customer information. 'Your information is within the affected data records.' Information that was compromised can include customer names and contact information such as e-mail addresses, phone numbers, and mailing addresses, but not banking or credit card information, it added. C&C also made a police report after it discovered the data breach. The note said: 'Once we became aware of the incident, we took measures to prevent further unauthorised access to the system. A thorough investigation was carried out to establish the facts and it is still ongoing.' It added that forensic investigators were activated to look into the possible causes of the hack, and it had informed the PDPC as well. C&C advised affected customers to keep an eye out for phishing activities or suspicious requests for personal information following the incident. Those who have enquiries or wish to report any suspicious activity can contact C&C customer care officers at 6471 9111 or via e-mail at customerassistancecentre@ Anyone who needs more information on the protection of personal data can refer to the PDPC website. The Straits Times has contacted C&C and the police for more information. Source: The Straits Times © SPH Media Limited. Permission required for reproduction Discover how to enjoy other premium articles here
Yahoo
11 minutes ago
- Yahoo
Slow US job gains expected in July; unemployment rate forecast rising to 4.2%
By Lucia Mutikani WASHINGTON (Reuters) -U.S. job growth likely slowed in July, with the unemployment rate forecast rising back to 4.2%, but that probably would be insufficient to spur the Federal Reserve to resume cutting interest rates soon as tariffs are starting to fan inflation. The anticipated slowdown in nonfarm payrolls in the Labor Department's closely watched employment report on Friday would mostly be payback after a surprise surge in state and local government education boosted employment gains in June. The U.S. central bank on Wednesday left its benchmark interest rate in the 4.25%-4.50% range. Fed Chair Jerome Powell's comments after the decision undercut confidence the central bank would resume policy easing in September as had been widely anticipated by financial markets and some economists. Though Powell described the labor market as being in balance because of supply and demand both declining at the same time, he acknowledged that this dynamic was "suggestive of downside risk." Job growth has slowed amid uncertainty over where President Donald Trump's tariff levels will eventually settle. Trump on Thursday slapped dozens of trading partners with steep tariffs ahead of a Friday trade deal deadline, including a 35% duty on many goods from Canada. The White House's immigration crackdown has reduced labor supply as has an acceleration of baby boomer retirements. "We just don't have a roadmap yet with respect to tariffs, and now that it's coming into place, I think that can certainly help, but if you're thinking about what you're planning for your business over the next two to three years ... you don't want to make that decision until you know what your costs of running your business are going to be," said Michael Reid, senior U.S. economist at RBC Capital Markets. Nonfarm payrolls likely increased by 110,000 jobs last month after rising by 147,000 in June, a Reuters survey of economists showed. That reading would be below the three-month average gain of 150,000. Estimates ranged from no jobs added to an increase of 176,000 positions. An economist predicting no change in payrolls pointed to the jump in state and local government education jobs in June, which accounted for nearly half of the employment gains that month. "When the academic year ends, there is a huge drop in payroll levels at schools," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets. "The fact that there were fewer reductions than usual in June suggests to me that more of the usual wave of reductions came in July." Stanley also argued that there had been a torrent of anecdotal and survey evidence suggesting that businesses large and small slowed their hiring activity this summer in the face of elevated policy uncertainty. This led Stanley to anticipate private sector payrolls growth slowed further in July rather than accelerated as most economists expected after the economy added the fewest jobs in eight months in June. LOW BREAK-EVEN NUMBER Federal government job losses as the Trump administration wields the axe on headcount and spending, excluding immigration enforcement, could mount after the Supreme Court gave the White House the green light for mass firings. But the administration has also said several agencies were not planning to proceed with layoffs. The reduction in immigration flows means the economy now needs to create roughly 100,000 jobs per month or less to keep up with growth in the working age population. The decline in the unemployment rate to 4.1% in June was in part due to people dropping out of the labor force. July's anticipated rise would still leave the jobless rate in the narrow 4.0%-4.2% range that has prevailed since May 2024. "The July jobs report is unlikely to shake the Fed out of its 'wait-and-see' posture," said Gregory Daco, chief economist at EY-Parthenon. "But it will add further evidence that the labor market is gradually losing momentum." Financial markets have pushed back an anticipated September rate cut to October. With tariffs starting to raise inflation, some economists believe the window for the Fed resuming policy easing this year is closing. But others still believe the Fed could still cut rates in September, especially if the Bureau of Labor Statistics' preliminary payrolls benchmark revision in September projects a sharp decline in the employment level from April 2024 through March this year. The Quarterly Census of Employment and Wages, derived from reports by employers to the state unemployment insurance programs, has indicated a much slower pace of job growth between April 2024 and December 2024 than payrolls have suggested. "If it's an ugly downward revision, the Fed will move, there is no question," said Brian Bethune, an economics professor at Boston College.
Yahoo
11 minutes ago
- Yahoo
Morning bid: 'Tariffs - use this version, please'
A look at the day ahead in European and global markets from Stella Qiu: It is tariff deadline day and President Donald Trump delivered by slapping fresh levies on imports from dozens of countries, including those that do not have a trade deal yet. Rates were set at 35% for Canada, 25% for India, 20% for Taiwan and 19% for Thailand. Switzerland got a whopping 39% -- one of the steepest -- raising the question: what's Trump got against the Swiss? Not buying enough American chocolate or watches? The big day comes after months of posturing, meetings, delays and truces, which prompted some investors to question what was a real threat and what was a bluff. Indeed, there is still much to be resolved. Arguably, most levies are lower than those threatened on April 2, which back then sent markets into a tailspin. Plus the big trade deals with Japan and the European Union have been reached while talks with China and Mexico are still ongoing. That is probably why market reaction this time has been much more muted. Sure, most Asian shares fell, but only modestly. South Korea is an exception, tumbling over 3%, in part due to domestic tax cuts being rolled back. Taiwan's president said the 20% levy is only temporary and is expected to be reduced further when a deal is reached. Wall Street and European shares did not seem to be too bothered by the tariff news. EUROSTOXX 50 futures slipped 0.3%. Both Nasdaq futures and S&P 500 futures fell 0.2%, thanks to a 6% tumble in Amazon after its earnings failed to meet lofty expectations. Now, with the tariff news out of the way, euro zone flash CPI is due later in the day and expectations are for a slight easing to 1.9% in July from 2.0% in annual terms. Markets have only priced in half a cut from the European Central Bank by early next year. And then it's all about waiting for payrolls, which will be pivotal for hopes for a rate cut from the Federal Reserve in September, which is now priced at just 40%, way off 75% a month ago. Forecasts are centred on a 110,000 rise in July, while the jobless rate likely ticked up to 4.2% from 4.1%. Any upside surprises could price out the chance of a move next month, giving dollar bulls another reason to rally. The greenback is headed for the best week - with a gain of 2.5% against its peers - in nearly three years, solidifying its recent uptrend from a three-year low. It has found support from a hawkish Fed that has held off policy easing on tariff risks. And indeed, the Fed's preferred gauge of inflation came in a tad hotter overnight, showing some tariff impact. Key developments that could influence markets on Friday: -- Euro zone flash CPI for July -- U.S. payrolls for July, ISM Manufacturing survey Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.
