Chinese sellers and U.S. buyers prepare for the end of ultracheap shopping (2025)

China Outside China

Temu and Shein are set to raise prices ahead of the de minimis loophole’s closure.

Phillip Dampier, in Rochester, New York, spends up to eight hours a day on Chinese shopping sites, and has already shelled out about $3,500 on electronics and home goods. He is among the millions of Americans who frequent e-commerce platforms Temu, SheiniSheinFounded in China in 2008 and headquartered in Singapore, Shein is a fast fashion brand that grew rapidly through exposure on social media.READ MORE, and AliExpress, where ultralow prices may soon disappear as new tariffs take hold.

“I am stocking up on everything I think I will need over the next two to three years,” Dampier, a 57-year-old consumer rights writer, told Rest of World. He is buying a new computer, light bulbs, and blankets, among other items for his household, he said. “I literally am sitting in front of my computer, putting orders in about seven, eight hours a day.”

In 2024, some 1.36 billion packages entered the U.S. under the de minimis exemption, increasing nearly tenfold from a decade ago. More than half the shipments came from China. U.S. politicians have accused China of exploiting the rule to flood the country with cheap products and illicit drugs. The Biden administration had also sought to close the loophole, despite warnings that taxing such a massive volume of goods would overwhelm customs officials.

Although Amazon dominates the U.S. online shopping market, the Chinese sites have lured customers fast with low prices, aggressive advertising, and game-like referral campaigns. Now, Chinese suppliers — many reliant on the de minimis loophole — are trying to adapt by storing inventory in the U.S., rerouting through other countries, or seeking new markets.

With the deadline fast approaching, Temu and Shein saw sales surge in March and April. Both platforms informed customers last week that they would start making “price adjustments” from April 25. On TikTok and Reddit, many shoppers have shared experiences of placing large orders before the tariffs kick in.

Meanwhile in China, sellers, too, are frantically preparing for the end of the bargain goods trade. The de minimis rule and the rise of platforms like Temu and Shein had made it easier for small factories and traders to expand abroad, as the platforms took care of cross-border shipping for their suppliers. But suppliers, whose profit margins were already thin, are now facing a potential collapse of their U.S. businesses.

Wang, a Hangzhou-based entrepreneur who only gave his last name due to privacy concerns, opened a factory last year making 3D wooden puzzles to sell to American and European consumers on Temu. Now, he is preparing to open a store on Amazon, as well as on Chinese domestic shopping site Tmall.

“I need to make sure I’m still building new sales channels, so my team can survive,” Wang told Rest of World. “America is only part of the market.”

Others may abandon the U.S. market altogether. Mike Zheng, a merchant in Guangdong province, who sells customized gifts such as Christmas socks and Easter toys on Etsy, told Rest of World he will temporarily shut down the business if the de minimis exemption ends.

Some logistics firms are rerouting shipments through third countries. An operator in China, who requested anonymity because he was not authorized to speak to the media, told Rest of World his company is helping customers ship parcels from China to the U.S. through another Asian country where they can still avail of the de minimis exemption. The rerouting costs about $5 per package, he said.

Chinese e-commerce platforms typically offer two logistics options to suppliers: Sellers can send goods to the platforms’ warehouses in China, and the platform handles packaging and shipping. Alternatively, sellers can bulk-ship goods to the U.S., and be responsible for processing individual orders.

In recent months, Temu and Shein have been encouraging Chinese sellers to shift to the option of bulk-shipping their products to U.S. warehouses, by offering subsidies and waiving commissions. The push has brought business to both commercial warehouses and immigrant-run “family warehouses” in the U.S. that store inventory and ship orders for Chinese sellers.

It’s unclear how Chinese e-commerce platforms will handle their own shipping logistics after May 2. A person familiar with Temu’s operations told Rest of World the platform was looking into moving its inventory to the U.S. by sea, paying tariffs for bulk shipments, and distributing the goods from its U.S.-based facilities.

Chinese e-commerce and logistics companies have also been buying up warehouse space across the U.S. since Trump took office. Two warehouse operators told Rest of World they had seen a recent uptick in inquiries.

The removal of the de minimis exemption would pressure platforms like Temu and Shein to operate more like Amazon in terms of logistics, pricing, and product offerings, according to Yao “Henry” Jin, an associate professor with Miami University, who researches supply chain management.

Chinese sellers were able to offer niche products without bearing the risk of inventory piling up in the U.S. because of the de minimis rule. In the future, only products with high sales volumes would survive on Chinese shopping sites, Jin told Rest of World.

“[Chinese platforms] are going to become more like Amazon. Their prices are going to go up, but their selection is going to decrease,” he said.

Back in Rochester, Dampier’s dining room is piling up with boxes. More than 100 packages are still on the way, he said.

“It just reminds me of Covid[-19], when you stocked up and then you stayed out of the stores,” he said. “May 2, it all stops.”