Online retail giant Shein reported a quarterly loss of $99 million (£74.1 million) due to the elimination of an import duty exemption by former US President Donald Trump. The removal of the “de minimis” tax rule, which allowed duty-free entry for imports under $800, impacted companies like Shein that relied on the rule to sell low-value items from China. This change led to all commercial shipments being subject to standard customs duties and tariffs in the US.

Shein stated that the loss in revenue was primarily attributed to the removal of the US de minimis exemption, affecting its sales and overall net revenue growth. Despite the setback, the company noted signs of consumer behavior normalization and improving sales trends in the US.

Comparing to the previous year’s profits of $395 million (£296 million), Shein’s loss highlights the significant impact of the policy change. The company’s sales slightly increased by 1.1% to $9.05 billion (£6.78 billion) in the same period.

Additionally, Shein mentioned a $328 million (£246 million) impact from an accounting adjustment related to special investor shares, contributing to its first-quarter loss. The company is preparing for its stock market debut in Hong Kong.

In the UK, overseas retailers can send parcels worth less than £135 without import duties until October 2028, following an accelerated timeline due to a policy change. Similarly, the EU has initiated a temporary customs duty of €3 per item on low-value goods up to €150, with plans to revert to standard customs duties in July 2028.

Shein also expressed concerns about the EU’s removal of the small parcel exemption, anticipating a negative effect on its business. To mitigate the impact, the company is considering price adjustments in the US and Europe to offset the increased costs associated with duties and taxes.