In brief
Shein, the online fashion retailer founded in China and headquartered in Singapore, swung to a $99m quarterly loss because U.S. shoppers now face higher duties on small packages. The fall comes after President Trump ended the de‑minimis exemption that let items under $800 enter the U.S. duty‑free. The loss breaks earlier profits and comes as Shein prepares to list on the Hong Kong stock market. U.S. tariffs, combined with a new EU levy on low‑value e‑commerce imports, have pushed the brand to consider price hikes and cost‑cutting in its North American sales.
Shein, the fast‑fashion brand known for its low‑cost clothing lines, announced a $99 million loss in its first quarter of 2026. That loss follows a sharp drop in U.S. sales after President Donald Trump revoked the duty‑free exemption for small packages.
The de‑minimis exemption had allowed items under $800 to enter the United States without paying import duties, a rule many shoppers used to buy cheap pieces from sites like Shein and Temu. With the exemption gone, the company says it is raising prices in the U.S. and exploring other cost‑cutting measures.
Shein’s losses break last year’s profit of $395 million and come as the company gears up for an initial public offering in Hong Kong. Although details on the timing or size of the IPO are still unclear, the filing indicates that the brand will soon be listed on the Hong Kong Stock Exchange.
The U.S. tariff change and a new €3 (£2.56; $3.42) levy imposed by the European Union on low‑value e‑commerce imports have further squeezed profit margins. Shein highlighted the impact of the Trump‑signed executive order, which broadened the tariff exemption to cover all goods from outside China and Hong Kong.
In the quarter ending March 2026, Shein registered 281 million active customers, a 16% year‑on‑year increase, placing more than a billion orders. The company also noted delays caused by the Iran war, which increased demand and operational costs in some markets.
Shein’s filing revealed a paper loss of $328 million due to an accounting change for special investor shares, possibly affecting the value of its upcoming stock listing.
For more on the U.S. tariff overhaul, see the Trump‑signed executive order that ended the global de‑minimis exemption.
