“Cheap goods” sold on Temu and Shein aren’t as cheap as they were 24 hours ago. On Friday, the two companies raised prices on many goods in advance of new tariffs set to take effect next week. The companies had informed shoppers of the coming price hikes last week. American customers of Temu and Shein, which source most of their products from China, have largely been able to avoid paying tariffs due to an exemption on shipments of goods worth less than $800. That exemption, known as “de minimis,” is expiring on May 2, the result of an executive order President Donald Trump signed earlier this month. Businesses will either have to pay a 120% tariff or a flat $100 fee per postal item. Come June 1, the flat fee will increase to $200. Two patio chairs listed on Temu and reviewed by CNN had a $61.72 price tag on Thursday. By Friday, they were listed at $70.17. On Shein, CNN noted a bathing suit set cost $4.39 on Thursday; on Friday it cost $8.39, a 91% increase. The price increases, however, weren’t consistent across the board for the basket of goods CNN tracked. In fact, a smart ring sold on Temu was about $3 cheaper on Friday than it was on Thursday. Prices fluctuate normally online so it’s not possible to know why certain prices rose and others didn’t. “Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments,” Shein said in a notice posted online recently. “We’re doing everything we can to keep prices low and minimize the impact on you.” Temu posted a note with similar language to customers informing them of price increases. The company said that “Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustment starting April 25, 2025.” Both sites encouraged customers to make purchases prior to April 25 to avoid paying higher prices. However, it’s unclear if buyers will avoid paying the 120% tariffs if their orders arrive after May 2. Shein and Temu didn’t respond to CNN’s requests for comment. A pain point for lower income consumers The lowest-income households in America spent more than triple their share of income on apparel compared to the wealthiest households in 2021, according to a report by the Trade Partnership Worldwide, an economic research firm, analyzing data from the Bureau of Labor Statistics. The end of the “de minimis” tariff exemption next month will also disproportionately hurt lower-income households, according to research from UCLA and Yale economists published in February. The share of packages delivered under the de minimis threshold declines with income, the study found, with 48% of packages shipped to the poorest zip codes, compared to 22% for the richest zip codes in the United States.
Shein and Temu just started raising prices ahead of new tariffs
TruthLens AI Suggested Headline:
"Shein and Temu Increase Prices Ahead of Imminent Tariff Changes"
CNN
8.1
TruthLens AI Summary
In a significant shift, Shein and Temu have raised prices on various products just ahead of new tariffs set to take effect on May 2. This change comes as both companies, which primarily source their goods from China, had previously allowed American customers to benefit from a tariff exemption on shipments valued at less than $800. With the expiration of this 'de minimis' exemption, businesses will face increased costs, including a 120% tariff or a flat fee that will rise from $100 to $200 for postal items by June 1. For instance, a pair of patio chairs on Temu saw a price jump from $61.72 to $70.17 overnight, while a bathing suit set on Shein rose from $4.39 to $8.39, marking a staggering 91% increase. However, the price adjustments have not been uniform across all products, with some items even seeing a decrease in price, indicating variability in how different goods are affected by the new tariffs.
Both Shein and Temu have communicated to their customers the necessity of these price hikes due to rising operating expenses linked to the changing global trade landscape. They encouraged shoppers to make purchases before the price adjustments take effect, although it remains unclear if orders placed before the tariff deadline will avoid the impending increases. The impact of these changes is particularly concerning for lower-income households in America, which already spend a disproportionate amount of their income on apparel compared to wealthier households. Research indicates that the termination of the 'de minimis' exemption will exacerbate financial strains on lower-income consumers, as they are more likely to receive packages that fall under the affected threshold. This demographic is expected to be disproportionately impacted by the new tariffs, with studies showing that a significant portion of packages delivered to poorer zip codes are now at risk of incurring higher costs due to these recent regulatory changes.
TruthLens AI Analysis
The news article highlights the recent price hikes by Temu and Shein in anticipation of new tariffs that are set to take effect. This development reflects a significant shift in the pricing strategies of these companies, which primarily source their goods from China and have benefited from a previous tariff exemption on low-value shipments.
Reason for Price Increases
The article indicates that both companies raised prices ahead of the expiration of the "de minimis" exemption, which allowed goods under $800 to enter the U.S. tariff-free. As this exemption is about to end, businesses will face substantial tariffs, prompting them to adjust their pricing structures to maintain profit margins. The announcement of price increases also serves as a preemptive measure to prepare consumers for the changes, potentially mitigating backlash.
Consumer Sentiment
By reporting on the price increases, the article may influence consumer perceptions regarding the affordability of goods from these platforms. The significant price hikes for some items could create a sense of urgency among consumers to purchase before prices rise further, while also sparking discussions about the sustainability of fast fashion and the impact of tariffs on consumer goods.
Transparency and Communication
Both companies have issued statements acknowledging the need for price adjustments due to increased operating costs. This transparency could be seen as an attempt to foster goodwill among consumers, reassuring them that the price hikes are a necessary response to external economic factors rather than merely opportunistic profit-taking.
Market Implications
The article also raises questions about how these price increases will affect sales and consumer behavior. If customers react negatively to the hikes, it could impact both companies' market positions. Additionally, the changes may influence stock prices and investor sentiment toward companies reliant on low-cost imports, especially in the retail sector.
Broader Economic Context
The upcoming tariff changes reflect larger trends in U.S.-China trade relations and could signal a shift in the global supply chain dynamics. This development may resonate beyond just Temu and Shein, affecting other e-commerce platforms and retailers that depend on Chinese-made goods.
Manipulative Elements
While the article aims to inform about the price changes, it could also be interpreted as subtly nudging consumers to act quickly in their purchasing decisions. The emphasis on the percentage increases in certain products may fuel a sense of urgency, potentially leading to impulsive buying behaviors.
The article appears to be factual in its reporting of price changes and tariff implications, though it also carries an undertone that may encourage consumers to purchase before further increases. Overall, it presents a nuanced view of the current economic landscape as it pertains to consumer goods and trade policies.