A week ago, Trump claimed that the United States and China had achieved an agreement to suspend their trade battle for 90 days. Among the most significant measures is a drop in the general tariff from 145% to 30% beginning on May 14. Shein did not want to miss out on the opportunity to begin a summer campaign to capitalise on tariff reductions and enhance sales, which have been impacted since the President of the United States implemented this new tariff law. The low-cost garment company’s email inspired its customers, but it also resulted in a shift in international tax policy.
New statement of significant importance: the email that transformed the situation
The ultra-fast fashion company announced on its website and in an email to clients that it will decrease prices on ‘a wide range of designs, which means further savings on summer offers’. Furthermore, the announcement on the website is accompanied by an explanation of the tariffs and how they affect consumer orders.
Shein further stated that they will not apply’surprise costs’ at checkout. This hints at the strategy taken by competitor Temu, which has just added a premium at the conclusion of import orders.
Tariff reduction: The New Macro Logistics
Tariff reductions have been supplemented by changes to de minimis policy, which will now have a rate of 54%, down from 120% previously. However, on May 2, the Trump administration revoked the tax exemption for items worth less than $800.
The company has been substantially impacted by the regulations established by the US president since he took office, as the majority of its supplies are supplied directly from China. However, the corporation is exploring rectifying this position by establishing a macro logistics facility in Vietnam.
Falling sales: keep an eye on this year’s sales
Shein’s observed sales in the United States have fallen since the platform began boosting pricing on April 25. Sales were 15% down in the seven days ended May 4, compared to the same period last year. It should be noted that credit and debit card transactions are extremely diversified. Sales, as well as other platforms that use the same sales model, declined by 10% in the week of May 4, compared to 2024. The volume of transactions in the United States is reaching unprecedented levels.
Following last month’s price rise, customer traffic on both platforms continued to decline. The average daily consumer traffic in the fortnight before the price increase, up to 9 May, was more than 20% lower than the fortnight before the modifications.
Shein moves its logistics to Vietnam
US trade policy changes have had a significant impact on Shein. Now, the company is looking for new business methods to rethink its supply network and minimise the economic impact.
Shein has begun building of a big warehouse in Vietnam that will serve as a distribution centre for exports to the United States, allowing it to dodge the tariffs imposed by Donald Trump on China. However, its primary investments will remain in China, where it plans to build a facility in Guangzhou worth 1,237 million euros.
The warehouse will cover over 15 hectares near Ho Chi Minh City, one of the country’s most populous cities. This facility will receive clothing from distributors, which will subsequently be processed and shipped directly to the US market. In this approach, the ultra-fast fashion company may diversify its logistics and lessen its existing reliance on China.
In addition, the company is thinking of extending its warehouse in southern Vietnam and diversifying its output in countries like Brazil and Turkey.