Fast-fashion e-commerce giant Shein swung to a quarterly loss as US President Donald Trump’s removal of a key import duty exemption slowed its sales, according to a regulatory filing reported by the BBC. The company, headquartered in Singapore but founded in China, posted a net loss of $99m (£74.1m) for the first three months of 2026, versus net income of $395m in the same period a year earlier.
De Minimis Exemption Removal
The primary driver of the loss was an executive order signed by Trump that ended the global de minimis tariff exemption, which took effect on 29 August 2025. That order broadened an earlier action targeting China and Hong Kong to cover all countries. The exemption had allowed goods valued at $800 or less to enter the US without paying any tariffs. US consumers widely used this provision to buy cheap goods from online platforms like Shein and Temu. The White House said the global exemption was being used to “evade tariffs and funnel deadly synthetic opioids” to the US.
“The removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues,” Shein stated in the filing.
Financial Impact and Response
The quarterly loss also reflected a $328m paper loss from an accounting change for special investor shares, which can be converted into ordinary stock and whose value fluctuates before a listing. “In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs,” Shein said.
Beyond tariffs, Shein noted that the Iran war had hit demand, increased costs, and caused delivery delays in some markets. The filing revealed that in the year ending March 2026, Shein had 281 million active customers—a 16% increase year-over-year—who placed a total of more than one billion orders.
IPO Progress and Regulatory Approvals
The disclosure is part of Shein’s preparations for a stock market listing in Hong Kong. On 10 July 2026, the China Securities Regulatory Commission (CSRC) granted Shein approval for a Hong Kong share sale, after failed attempts to list in New York and London. The filing did not include details on the size, timetable, or pricing of the planned initial public offering (IPO). The Hong Kong listing is expected in the coming months.
EU Levy on Low-Value E-Commerce Imports
| Jurisdiction | Measure | Effective Date | Impact on Shein |
|---|---|---|---|
| United States | Removal of de minimis exemption ($800 threshold) | 29 August 2025 | Adverse sales impact; price increases planned |
| European Union | €3 levy on low-value e-commerce imports | July 2026 | Additional cost pressure |
Earlier in July 2026, the European Union imposed a €3 levy (approximately £2.56 or $3.42) on low-value e-commerce imports. The EU said the measure is aimed at curbing unfair competition from China.
Outlook for Trade Professionals
Importers and exporters should monitor how Shein’s price adjustments in the US market affect customs valuations and duty calculations. The removal of the de minimis exemption has already forced a major e-commerce player to restructure its US pricing strategy, potentially setting a precedent for other low-cost online retailers. The EU’s new levy adds a further layer of compliance cost for companies relying on small-package shipments. With tariff uncertainty between the US and China currently paused, but with the Iran war adding supply chain disruptions, trade professionals must prepare for multiple regulatory shifts affecting low-value imports.
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