The data point: Shein’s US sales fell 8% YoY in September, the first full month after the Trump administration ended the so-called de minimis trade loophole on August 29, per Bloomberg data based on transactions from an anonymous set of US shoppers.

• The rule had allowed foreign packages valued under $800 to enter the US tariff-free. The administration had already revoked the exemption for shipments from China and Hong Kong on May 2.
• It was the retailer’s second-worst month in three years, supporting the Trump administration’s argument that closing the de minimis loophole levels the playing field between international ecommerce firms and US retailers.

The context: Use of the de minimis exemption surged over the past decade—from 134 million shipments in 2015 to more than 1.36 billion in 2024, according to the White House.

Shein was a major driver of that growth as its ability to ship directly to consumers and avoid import duties helped it keep prices low. The approach fueled $18 billion in sales last year, according to our forecast.

Since the administration closed the loophole for Chinese packages, Shein has taken steps to try to regain its footing.

• Even before the change took effect, it raised prices, leading US sales to drop 23% during the week of April 25–May 1 compared with the prior week.
• The company then pivoted to Europe to offset its US losses, but marketplace sellers were reluctant to follow, partly because the US remains too valuable a market to abandon and partly due to the bureaucratic hurdles of selling across European markets.
• More recently, Shein launched its Xcelerator program, giving fashion brands access to its manufacturing network in exchange for joining its marketplace. The initiative also offers warehousing, sales support, sample development, and other services.

Our take: The era of easy growth built on the de minimis exemption is over. If Shein can’t evolve beyond its low-cost model, it risks losing the market dominance it once disrupted.