Insights Flash: How Trade Policy Shifts Could Reshape E-Commerce
Amid changing trade policy and the threat of a trade war, market watchers are concerned about the closure of the de minimis exemption, a policy that allowed goods under $800 to avoid duties or having customs inspections. This change in policy would have a particularly adverse impact on Chinese e-commerce companies such as Temu and Shein, which benefited from the loophole as they flooded the American market with cheap and trendy products.
Leveraging Consumer Edge transaction data, we can see that Temu and Shein represented about 0.75% and 0.5% of total U.S. e-commerce spend, respectively, both down substantially from their pre-holiday peaks. If the de-minimus exemption goes away permanently, these companies could see share drop further, potentially benefiting e-commerce market leader Amazon and retail giant Walmart. Other firms that might benefit from the change are domestic discount and fast fashion retailers that felt the pain from the challenge these upstarts brought.
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About the Authors
Harsh Masher is an Insights Analyst for the CEIC.
