Shein, the fast-fashion giant that rose to global dominance on ultra-cheap prices, has posted a quarterly loss of $99m (£74.1m) after Donald Trump’s decision to scrap a key import duty exemption battered its US sales.
The loss for the first three months of the year compares with a net income of $395m a year earlier, according to a filing that also revealed a paper loss of $328m linked to an accounting change for special investor shares. The company said the slide was driven by the US president’s executive order ending the so-called de minimis exemption, which had allowed goods valued at $800 or less to enter the country duty-free.
“Shein swung to a $99m loss after Trump ended a tariff exemption, as it prepares for a Hong Kong IPO.”
The White House justified the move, which took effect on 29 August 2025, by arguing the exemption was being used to “evade tariffs and funnel deadly synthetic opioids” into the US. The impact was immediate: “The removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues,” Shein said in the filing.
The company warned that it is now considering raising prices in the US to offset the increased costs, while also citing the Iran war and the tit-for-tat US-China tariff war – currently paused – as factors that have hit demand, increased costs and caused delivery delays in some markets.
The disclosure comes as Shein presses ahead with plans for a stock market debut in Hong Kong, having failed in earlier attempts to list in New York and London. On 10 July, the China Securities Regulatory Commission approved the share sale, though the filing gave no details on the size, timetable or pricing of the initial public offering. A listing is expected in the coming months.
Despite the financial stumble, Shein’s customer base continues to grow. The filing showed 281 million active customers in the year to the end of March 2026 – a rise of more than 16% – who placed a total of more than one billion orders.
To compound the headwinds, the European Union imposed a €3 (£2.56; $3.42) levy on low-value e-commerce imports earlier in July, a measure the bloc said was aimed at curbing unfair competition from China. Shein’s fate now hinges on whether its customers – accustomed to near-zero prices – will accept the cost of a new trade landscape.