1993: Tax and duty exemption allowed for overseas direct purchases under $200
2016: Raised to $800 to respond to global e-commerce
As the US abolished import tax exemption privileges for Chinese low-price products, Temu and SHEIN — which grew through ultra-low pricing strategies — face fundamental business model transformation. The global e-commerce playing field is changing.
The "institutional shock" of exemption abolition: On May 2, 2025, the US government officially revoked the small-value (under $800) import tax exemption (de minimis) applied to products shipped from China and overseas. This had been the core foundation enabling Chinese ultra-low-price e-commerce platforms like Temu and SHEIN to maintain price competitiveness in the US market. Background: The de minimis regulation began in 1993 (NAFTA era, $200 threshold) and was raised to $800 in 2016 under the Obama administration through the Trade Facilitation and Trade Enforcement Act (TFTEA) to support rapidly growing e-commerce. However, Chinese low-price platforms exploited this by splitting unit prices below $800 for mass import without tariffs — US domestic retail and manufacturing strongly protested "unfair competition," with the IRS pointing to billions in annual lost tariff revenue.
Temu and SHEIN's DTC platform structure: AI-based demand forecasting (real-time analysis of click, search, purchase patterns); ultra-connected logistics (direct-to-consumer from Chinese smart factories); social media-centered marketing (influencer and viral content minimizing advertising costs) — completing "ultra-high-speed distribution systems" from product planning to consumer delivery in days. But this entire innovation was built on the de minimis exemption as a hidden pillar. Three forced choices now: (1) Price increases (consumer churn risk); (2) Margin sacrifice (profitability deterioration); (3) Local sourcing transition (higher costs of domestic production). Temu is now pursuing US domestic SME seller and local production partner collaboration. SHEIN is expanding production bases to Mexico, Brazil, India. Global regulatory domino: EU reviewing "import customs unification" and "platform responsibility strengthening"; Australia and Canada examining criteria adjustments. Korea's 150,000 won exemption threshold also faces scrutiny for exploitation. "This is not simple 'import tax imposition' but a signal of 'e-commerce reset' for domestic industry protection and tax justice."
