Yves here. Your truly is of two minds about the worked example in this post, of a cheap Shein dress from China and how Trump starting to close the de minimus loophole will affect that. Mind you, this piece only addresses the financial cost to consumers, and not the additional hassle, which I assume entails having to go to the Post Office to pay the duty owed and collect the shipment. I deal with this here in Southeast Asia. Only a few foreign companies are set up to collect the duties on their end at the time of purchase so that the item can indeed go directly to the buyer. I have sometimes had the painful experience of going to the customs office, once at the port in the north, the other time in the next province. The former entailed a huge runaround to four different places in the port operation to show my purchase information, obtain authorizations, pay, and then collect the shipment. Oh, and in both cases, the records were all paper based.
The reason for the mixed feelings is that it’s hard to sympathize much with fast fashion. Our former writer Jerri-Lynn Scofield had fast fashion as one of her beats, chronicling its high environmental cost as well as the oppressive work conditions and poor pay in the factories that produced them. I must confess that having consumed a tiny bit of fast fashion (at H&M not long after it opened stores in the US), I found its products to be junk, with seams opening and colors bleeding after a single washing. So if anything, Jerri’s critique of how these clothes quickly choke landfills is if anything understated.
But being poor is expensive and thanks to Trump, is becoming more so. Shein and Temu, which are the big targets of this opening salvo on low value shipments, have low income Americans as a big portion of their US customers. So this salvo above all will hit already budget-stressed Americans hardest.
Some readers will point out that frequenting thrift shops is an alternative: you can get products at budget prices that last longer. That may be true but only up to a point. Shopping is a tax on time and the relatively poor are often time poor. And those who live in remote areas aren’t likely to have much in the way of reasonably stocked thrift shops.
By Vivek Astvansh, Associate Professor of Quantitative Marketing and Analytics, McGill University. Originally published at The Conversation
Fast fashion got a lot pricier for Americans this spring – and it’ll likely get even more expensive in 2027.
That’s because the Trump administration has been rolling back a little-known feature of U.S. customs law that for years had allowed retailers to ship packages duty-free to U.S. shoppers – as long as each shipment was valued under US$800. Known as the “de minimis” exception, this rule had helped keep prices low on Chinese e-commerce platforms such as Shein and Temu, boosting their popularity with American shoppers.
But as of May 2, 2025, that advantage disappeared – at least for China and Hong Kong. That’s when the U.S. officially eliminated the exemption for low-priced imports from those places. Suddenly, cheap fashion wasn’t so cheap anymore – and demand for Shein and Temu plummeted.
But while bargain hunters might hope for workarounds by ordering from platforms based in Vietnam or elsewhere, that’s a temporary fix. The exemption is set to be eliminated for all countries in 2027, thanks to language in the tax and spending bill just signed into law.
But hold up – what’s “de minimis,” anyway?
Cheap Dresses and ‘Petty Matters’
I’m a professsor of marketing who’s long been interested in this loophole. De minimis is short for de minimis non curat lex, which means, “The law does not concern itself with petty matters.” In trade terms, the de minimis exemption refers to a value threshold below which imports can enter a country without duties. Imagine the government saying, “It’s so cheap we won’t even bother with it.”
The de minimis exemption was introduced as part of the Tariff Act of 1930 and was initially set at $200. It stayed at that level until 2016, when the U.S. bumped it up to $800. Raising the limit helped small companies as well as individual shoppers, and from 2016 to 2023 de minimis shipments skyrocketed – rising sixfold to more than 1 billion annually.
But it left large companies, which import items in bulk, at a disadvantage. That’s one reason why, historically, the same dress might cost more money in a U.S. retail store than it would if you bought it online from an e-commerce company.
A Case Study: Your $20 Shein Dress
Imagine it’s January 2025. You’re scrolling Shein, and you spot a trendy dress priced at $20. You order the dress to be delivered to your home. The seller packs your dress and exports it to your home address. The package arrives at the U.S. border. Because the package’s “value” – specifically, the price you paid – is below the U.S. “de minimis” threshold of $800, the U.S. Customs and Border Protection exempts the importer – that is, you – from paying any import duty. You pay just $20.
Now imagine you’re trying to order the same dress in mid-July.
Executive Order 14256, issued on April 2, states that such an item, if shipped via international mail from China or Hong Kong, could be subject to an ad valorem duty of up to 20% of the item’s value, or a specific dollar amount per package, which could be $100 or more. This was increased to 30% on April 8 and 84% the following day. In the most recent modification, dated May 12, the percentage has been revised to 54%.
So, using the 54% ad valorem duty as an example, the import tariff on your $20 dress would be $10.80 – costing you $30.80 in all. Of course, the May 12 modification comes with the usual disclaimer: It will stay in effect “unless and until otherwise modified by a subsequent executive action.”
For millions of American shoppers, this is a wake-up call: Formerly tax-free fast fashion is now significantly more expensive. Thrifty shoppers might be tempted to buy from sellers in India or Mexico, where the de minimis exemption is still in effect — at least for now. The One Big Beautiful Bill Act ends the de minimis exemption globally starting July 1, 2027.
Trade policy has been unpredictable under President Donald Trump, and the de minimis rule has been no exception. But with the global end of the exemption now written into law, its future seems a little more certain. Although it’s always wise to watch for new developments from the White House, I suspect the U.S. de minimis exemption may soon be a thing of the past.
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I buy my dresses second hand – cum – third hand, and not many at that.
My hand you down society will feel further compression.
The customs charge applied depends on the declared price. The seller can always under declare the price, e.g. to just $5 and pay the 54% only on the lower declared price. It’s difficult for customs operations to systematically validate this. Though Temu & SheIn who run the logistics on behalf their sellers and also do the customs declaration on their behalf won’t be able to systematically cheat on scale. They pivoted already away from US doubling down on global markets in April. The world will enjoy cheap goods while US consumers will have to pay more. I don’t think US factories will be able to compete with Chinese consumer goods – even with prices after tariffs.
There will be few if any US companies willing to make the investment to produce such goods
In Thailand, which is hardly sophisticated, they want to see a receipt. If the seller did not send one, the buyer has to provide the seller’s product description and price (as in a printout) for the computation of tariffs and collection of goods.
Saying a $200 of dresses was only $5 on a receipt is an open-and-shut for the buyer to file a dispute on their credit card and get $195 back.
I think critcisms of fast fashion are very valid in terms of working conditions, environmental cost, etc. However, I’m not convinved more expensive clothing is much better. I suspect much of it is still made in the same conditions, is not particularly better quality, and just has a higher price tag due to the label sewn onto it.
There are still quality clothes being made – especially for men. But only very high end and not enough to make thrifting helpful.
Some heavy work clothes are still well made but that sort of thing is typically worn to death and, even if some has a major weight change or dies and their clothes go to the church shop, they’re heavy work clothes which aren’t really super for a lot of day to day wear.
I have thrift-store dresses that, based on style, were decades old when I bought them in collage and they’re still fine shape. (Except that one rayon dress that eventually fell in shreds.)
OK, they’re addressing “fast fashion,” but what about work boots? Inexpensive tools? Cookware? Clothing required for employment? Any of the stuff that you might actually need in life? Hardly any of that is Made in USA anymore– and even if it was, the production-inputs required for manufacturing (unless plastic) would be tariffed to death too, jacking-up the costs/prices to “consumers.”
A lot of thrift stores– especially in cities– are filling up with fast-fashion and other cheap, unwanted crap, but here in the rurals (where I’m currently ensconced) you can still occasionally find relatively ancient, well-made treasures for cheap, albeit, hidden amongst endless piles of shite.
These tariffs are undoubtably another tool to extract wealth from the poors and the dwindling remainders of the American middle class, and when you’re struggling for mere survival that doesn’t leave much in the way of time or energy to fight for anything else– certainly a circumstance that suits our masters just fine… that’s optimal, even.
Socialism, social democracy, these polite and timid adjustments to western capitalism are way past their sell-by dates: it’s time for hardcore and unapologetic communist revolution!!!
A couple of years ago Harbor freight was all from the People’s Republic. I should check them out now. A $20 good hammer now $30?
Harbor Freight don’t pay $20 for that hammer. $20 is the retail price. Assuming they buy it in bulk for, say, $5 per unit, the tariff will be approx. $2.50.
So the retail price should be $22.50.
Surely they would not be so unscrupulous as to charge the US consumer even more?
This is another example of our Dear Leader getting the cart before the horse. A rational actor, (I know, I know,) would promote domestic production before imposing tariffs. Then at least some “local” product would be available to substitute for the now more expensive imported items.
The theory of “if we impose tariffs, producers will scramble to fill the new niches” is like the “Trickle Down” tax theory. It presupposes a general public eager to experience the joys of Elite Golden Showers.
From what I am seeing at present “on the street,” the general feeling is that the old exhortation, “the whippings will continue until morale improves” has been replaced with “the whippings will continue until the grumbling stops.” There is a subtle but profound difference between the two theories of governance. I expect the meme to soon become, “the whippings will continue because we enjoy whipping you all.”
Stay safe. Prepare for Societal Collapse Syndrome.
The main issue I see is the whippings not really kicking in until after the midterm elections – 2027 in this case. Many of the oppressive actions being “executive ordered” and in the BBB have dates of activation after those midterms in order to keep Trump’s base from totally abandoning him and allowing his policies to take shape before the next presidential election – good luck Vance.
Trump says the tariffs are paid by the producers. If he really believes that, it explains why he keeps doubling down. He hates foreigners (they make immigrants), and wants to hurt them. No, the tariffs are paid by the consumers, us. Producers in other countries don’t just make stuff and send it to us hoping to sell it. They send stuff when we order it. Well, they do hire sale persons to encourage our big companies to order stuff, but we can ignore that. Because they’re going to raise prices to pay the tariffs and they know higher prices mean less sales, our companies are going to order less, and it’s going to take a while to get things right. Expect high prices and shortages for the next couple of years.
I must live below “low income” level. I can’t afford to “eat out” or go out for entertainment, so why would I need “fast fashion”. My money is now spent on groceries, gas, and insurance. Any clothes I need is bought at Goodwill stores. T-shirts work just fine for fashion. But even with this, my social Security check doesn’t keep up.
forgot to add rent
I guess it’d be helpful to throw in the distinction between basic needs (stuff you really can’t survive or live for long without) and narcissistic needs (alternatively known as wants).
• Food: market much controlled by monopolies or cartels– costs skyrocketing and quality shite.
• Shelter: artificial scarcity, hedge funds driving up prices.
• Clothing: yeah, mostly cheap, poorly-made crap that doesn’t last long (unless you pay a steep premium) which necessitates more frequent repurchases.
• Transportation: public transportation is simply unavailable throughout much of the country, and where it is it is often expensive and unreliable. This necessitates private conveyance for many, and the innumerable costs associated with this.
• Healthcare: government funding gutted, private insurance costs skyrocketing.
• Education: oh please– shite quality for most and crazy expensive to obtain the credentials needed to get past the gatekeepers that secure the gates to barely decent employment (other discriminating factors may apply).
40-plus years since Reagan and Thatcher declared open war on public and common good and the major political parties kicked average citizens to the curb in order to cater to and serve the rich… “fast-fashion” is only one symptom of the disease.
Surely it’s about far more than clothing although that may be the most popular use. Most electronic parts come from China now and things like batteries for cameras. The real problem is that Trump, an ignorant fool (why mince words?), is using the US economy and not just foreign policy as his personal power trip. Trump seems to think being a boob makes him a man of the people and the source of his popularity. But I doubt that even the MAGA want that, at least when it comes to their money.
Our current situation is the result of the utter superficiality of our politics and of the MSM that covers it. They plug their ears and cover their eyes when it comes to Gaza but doubtful that they can get away with that domestically. Even Trump probably gets this which explains all the TACO. He just wants his ego trip and the attention.
It would be far better to promote production than put on tarrifs. That should be obvious, as it would benefit everyone, especially the poor.
So who would production benefit?
– the farmer who produces the flax or wool
– the person who mills the flax & wool to turn it into thread
– the weaver who makes the cloth
– the taylor that makes the shirt
– the retailer that sells the shirt
So if the focus was on production, a lot of people would go to work, and many of these people would no longer be poor.
I shop on ThredUp.com (I believe Naked Capitalism has covered online thrifting as a net negative in creating lots of waste) because I can shop all the brands at once, and it is honestly easier and less time consuming than shopping in physical or online stores for new clothes or local thrift stores for used clothes.
My daughter orders from Temu and Shein and other garbage retailers, and honestly, they almost never come as advertised, look cheap, and don’t last. It also encourages the whole “one outfit for one occasion” mentality. I look forward to any barrier that gets her to stop wasting money on this garbage.
Meanwhile, my $20 on a silk J Crew dress has taken me through at least 5 weddings.
As someone who has experienced the ‘Trump tariff’ torture the time and treasure involved is actually unknowable (at the moment). As I’ve recounted here in Comments a few weeks back: I purchased a few items from a European website (Germany). The price was indicated in both Euro’s and Dollars ($360). Shipping to the US was by UPS. I tracked the package online everyday. When the package went through Customs $250 was added to the price (well above the expected 10% tariff expected).
I attemtped to stop shipment, to no avail. The package arrived at my Post Office where I had instructed agents to reject the package and the $250 tariff. The package bounced around in the UPS system for a week before being returned to Germany. I asked for and received a return of the purchase price (without shipping) from the online seller. UPS continues to demand payment for the tariff (Good Luck with that!).
There currently is no way to discover the full cost of a shipped item before reaching Customs. Be forewarned.
It might not be Customs. It might be UPS. My brother ordered a package for delivery in Mexico and UPS charged him twice the import duty. We know that it was twice the legal fee because Customs in Mexico charges exactly 16% of the nominal cost in taxes so long as your package is under a certain $$$ amount and doesn’t belong to very specific product categories (steel and textiles? Idk the full list). We’ve also ordered through DHL and Fedex and have paid exactly 16% in taxes, so its definitely specific to UPS. I think UPS might be using the uncertainty around Custom fees to extort their customers.
If the tariff costs the same (as a percentage) to buy individual pieces as it does for retail outlets to buy large lots, and the real cost is the “pain in the backside” factor, then maybe this is a net advantage for retail outlets? If so, I think this is a good thing. I am lamenting the loss of retail outlets. Sometimes it is nice to actually go into a store and touch and feel and see the things you may want to buy. The trajectory things are going we may have almost no retail outlets within 10-20 years. I don’t mind so much direct sales undercutting the huge big box outlets, but the smaller to midsize retail outlets don’t stand a chance, having to compete with Walmart monstrous market share at the same time being undercut by the little one dress at a time transactions.
Problem is, you typically need a “broker” to deal with customs. A direct to consumer purchase has the problem of no established broker in the middle. Typical is for the express carrier (DHL/UPS/FedEx) to provide brokerage service on behalf of the customer/importer. Whereas a large importer can have brokerage/bonded warehouse contracted for at a much more efficient cost.
I seem to recall Matt Stoller writing about how the de minimus customs exception plays a role in how chemicals to make illegal drugs such as fentanyl are easily imported from China; I searched but could not find it. I did see other sources making the same contention.
I am fighting fast fashion with the slow fashion practice of making my own clothes. I buy most of my fabric from small businesses, some of them local. The tariffs are likely to hit this sector hard, and even with the growing interest in home sewing, it’s not a highly profitable business. JoAnn’s recently went out of business—due to the neglect and predations of private equity, it appears—leaving many areas without any local fabric stores.
One option for buying fabric online is buying from foreign retailers. I’ve bought from fabric from the UK and I’m probably going to order some directly from Japan, which produces great cotton fabrics. These orders now easily fall under the de minimus rule. I doubt that all these retailers will continue to sell into the US market under the new regime and those that do will certainly find their markets diminished. I know of one Canadian retailer that decided a couple of months ago that it was simply too much hassle to ship to the US anymore.
No one expects fabric manufacturing to make a comeback in the US anytime soon. The combination of tariffs and the end of the de minimus rule will make slow fashion as well as fast more expensive and more limited.
AS someone who used to make guitar pickups. I hated my Chinese competition that sold their products for less than my parts cost, and paid no duty when imported.
I’ll get out my tine violin.
Back when my kid was little, about 80% of his clothing was used. From age 0-2, I had source for hand me downs, but from age 2 to about 11, his clothing was a combination of local thrift stores, a giant 2X/year kids consignment sale held locally, but killed by Covid, and Ebay LOTS where people would sell a LOT (say 24 items in one large box) of clothing in a specific size, season, and gender. Even including shipping, it was great deal, but you had to not really care about specifics. Combined with a few grandparent gifts, I think I paid less than $200/year for his clothing (excluding shoes, socks and underwear) for the period from 2006-2015.
It WAS a tax on time though, but when I talked to friends and coworkers and found out what they were spending, the hourly wage was pretty good if I divided my savings by the hours I spent.
Once my son starting really caring about his clothes, I had to mostly stop buying 2nd hand.
However, my now college aged son with limited funds routinely shops 2nd hand for clothing. “Thrifting” is a thing, apparently.