A view of a Shein pop-up store at a mall in Singapore on April 4, 2024.
Edgar Su | Reuters
Shein’s ultracheap clothes can remain affordable as long as proposed tariffs from President Donald Trump are “applied equally,” the company’s executive chairman Donald Tang said Thursday.
“Affordability is a big anchor. … It’s the whole package of it, it’s a value for [your] money,” Tang told CNBC’s Sara Eisen during an interview at the World Economic Forum in Davos, Switzerland.
On the campaign trail, Trump had proposed tariffs as high as 60% on imports from China, where Shein primarily manufactures its clothes. He has since softened that stance and has suggested a 10% tariff instead.
When asked if Shein will still be able to provide its ultralow prices if tariffs take effect, Tang did not address whether the company would raise prices, but suggested that it would still be able to remain competitive as long as China does not see higher tariffs than other regions.
Imports from China already face tariffs, but critics say Shein has been able to avoid them by shipping its packages directly to consumers, which has shielded it from duties under a trade law called the de minimis provision. The so-called “loophole” allows packages valued under $800 to enter the U.S. with less scrutiny and without paying import duties and processing fees.
Last fall, the Biden administration announced new steps to curtail use of the de minimis provision by issuing a new rule proposal that would bar the exemption for products that are subject to U.S.-China tariffs. The move was aimed at companies such as Shein and competitor Temu, which have been blamed for the surge in de minimis shipments in recent years.
On Monday, Trump effectively endorsed Biden’s de minimis policy. In a trade memorandum issued during Trump’s first day in office, he instructed incoming Cabinet officials to assess the total import duties the U.S. stood to lose because of “the current implementation of the $800 or less, duty-free de minimis exemption,” and directed them to “recommend modifications as warranted.”
While it is not totally clear what they will recommend, the language strongly suggests that Trump plans to pick up where Biden left off in the bid to end de minimis exemptions.
The fast-fashion company has been on a meteoric rise over the past few years and had been planning for a U.S. initial public offering but ultimately scrapped those plans and turned to London when political sentiment soured on the Chinese-born company.
When asked about its plans for a London public offering, Tang declined to comment but explained why the company wants to be public.
“Being a public company embraces the very universal and unique mechanism for accountability,” he said, adding that public trust is “crucial” for long-term growth.
