China

Shein Records $99M Loss After Trump Ends De Minimis Exemption

Was ending the exemption a necessary fix or a costly burden on ordinary people?

Published JUL 27

Shein Records $99M Loss After Trump Ends De Minimis Exemption

Story

Above: Shein's company office in Guangzhou, China, on July 14. Image credit: Cheng Xin/Getty Images

The Facts

Fast fashion outlet Shein reported a net loss of $99 million in Q1 2026, compared with a net profit of $395 million during the same period a year earlier, according to a regulatory filing on Sunday ahead of a planned stock market debut in Hong Kong.
Hong Kong Stock Exchange
The Wall Street Journal
BBC News
The loss followed an executive order issued by U.S. President Donald Trump, effective Aug. 29, 2025, that ended the de minimis exemption allowing goods valued at $800 or less to enter the U.S. duty-free, citing national security and illicit drug concerns.
The White House
In a Post Hearing Information Pack, Shein claimed that the removal had an "adverse impact" on the company's U.S. sales and overall net revenues, before detailing plans to raise prices in the U.S. market to offset higher costs.
Hong Kong Stock Exchange
The move was compounded by the EU's introduction of a temporary €3 customs duty per item on low-value goods valued up to €150 from July 1, which will remain in place until July 2028, when normal customs duties will apply.
European Council
European Commission
On this, Shein warned that the EU's new fees may have a "material adverse effect" on its business, adding that trends in the bloc could match or exceed the impact seen in the U.S. since Europe accounts for a third of its net revenues, but that it was too early to assess fully.
Hong Kong Stock Exchange
Aside from this, Shein unveiled that its net profit margins for the first quarter had shrunk to 1.1%, down from 4.4% the previous year. Despite this, it reported having 281 million active customers in the 12 months to March 31, with roughly 1.09 billion orders placed.
Hong Kong Stock Exchange

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Narrative A

Ending the de minimis loophole was long overdue. For decades, bad actors have exploited cheap, low-value shipments to smuggle contraband and flood U.S. and EU markets with goods, undercutting local competition in the process. Slapping duties on these packages is a necessity if either is to have any hope of leveling the playing field, restoring fairness in trade and countering e-commerce giants gaming the system.

European Commission

The White House

Narrative B

Ending the de minimis will hammer everyday people the hardest, especially those in low-income households that rely on affordable imports, which could jump astronomically in price. The result is a policy that imposes costs on working people with no guarantee of effectiveness.