Here's What Temu and Shein Are Doing To Combat Tarrifs

Image Source: 123rf.com

It’s no secret that fast fashion giants Temu and Shein have upended the global retail landscape. Offering unbelievably low prices and lightning-fast shipping, these companies have found loyal customers across the world—but especially in the United States. However, their business model is now under increased scrutiny as governments, particularly the U.S., attempt to tighten regulations and impose stricter tariffs on Chinese imports.

With trade tensions rising and international oversight mounting, Temu and Shein have been forced to get creative to preserve their margins and maintain their competitive edge. Here’s a look at what these e-commerce juggernauts are doing behind the scenes to sidestep tariffs—and why their strategies are sparking fierce debate.

Leveraging the De Minimis Loophole

Temu and Shein have built much of their U.S. logistics strategy around the de minimis provision in American trade law. This loophole allows goods valued under $800 to enter the U.S. duty-free, as long as they are shipped directly to consumers. Because the majority of items sold on these platforms are low-cost and lightweight, the de minimis threshold fits perfectly with their model.

By shipping small parcels directly from China to American doorsteps, these companies avoid traditional import taxes that larger retailers must pay. This tactic, while legal, has drawn criticism from policymakers who argue it gives foreign e-commerce sites an unfair advantage over U.S.-based retailers.

Setting Up Warehouses in Mexico

To avoid additional tariffs and scrutiny, Temu and Shein have also turned their attention to Mexico. Both companies are exploring or actively investing in logistics centers south of the U.S. border, taking advantage of the U.S.-Mexico-Canada Agreement (USMCA). By processing or staging shipments in Mexico, they can technically reclassify goods before entering the United States. This could potentially allow them to avoid certain Chinese-origin tariffs, especially on sensitive or high-demand items. It’s a strategy that blurs the line between international logistics and trade circumvention, raising questions about long-term sustainability and legality.

Relying on Air Freight to Dodge Red Tape

Shipping by sea is cheaper, but it comes with more oversight and longer customs clearance times. To maintain fast delivery and reduce their exposure to regulatory inspection, Temu and Shein often opt for air freight instead.

While air shipping is more expensive, it allows parcels to slip through regulatory bottlenecks that are more common at seaports. This helps preserve the brands’ reputations for speedy fulfillment, even as customs authorities start to crack down on de minimis abuse. It’s a calculated trade-off that prioritizes speed and control over cost-efficiency.

Image Source: 123rf.com

Lobbying Behind the Scenes

Although their public faces are largely focused on fashion and deals, both Shein and Temu are quietly ramping up lobbying efforts in Washington, D.C. They’ve hired legal teams and policy consultants to engage with U.S. lawmakers and trade officials about tariff rules, e-commerce fairness, and digital trade policy. These efforts are part of a larger plan to secure a more favorable regulatory environment, or at least slow down any legislation that might directly threaten their operations.

By influencing the conversation at the source, these companies hope to delay or dilute the impact of any anti-China or anti-fast fashion initiatives. Their growing presence in American political circles signals a shift in how seriously they are taking trade threats.

Shifting Supply Chains to Southeast Asia

Another emerging strategy involves relocating parts of their manufacturing away from China. Both companies are exploring partnerships and sourcing options in countries like Vietnam, Bangladesh, and Indonesia. This move helps diversify their supply chain while also reducing their exposure to tariffs specifically targeting Chinese-made goods. Although this process is gradual and complex, it signals a willingness to evolve in response to the geopolitical climate. By sourcing from multiple countries, they also gain leverage in negotiations with suppliers and trade authorities.

Using Data to Optimize Shipment Values

Temu and Shein are not just relying on international logistics and trade lawyers—they’re also using advanced data analytics to game the system. Algorithms help them ensure that individual orders stay just below the $800 de minimis threshold, allowing more packages to slip through without duties. They can also break up larger orders into multiple shipments to avoid triggering additional customs scrutiny.

This approach makes it even harder for regulators to monitor or flag these shipments for taxation. It’s a high-tech cat-and-mouse game that tilts in favor of those with the most data and smartest algorithms.

Rebranding as U.S.-Friendly Brands

To deflect growing political scrutiny, both companies are making moves to reposition themselves as global—or even American-friendly—brands. Shein, for example, has announced plans to go public on a U.S. stock exchange and open a U.S. headquarters. These moves are meant to give the impression of a deeper commitment to American consumers and compliance. Temu, owned by Chinese tech company PDD Holdings, has similarly emphasized its U.S. marketing and customer service presence. The optics of being “local” or “global” rather than “Chinese” are critical in an era of heightened U.S.-China tensions.

Promoting Third-Party Seller Models

Both platforms are experimenting with third-party seller marketplaces that resemble Amazon’s approach. In this setup, independent vendors handle their own logistics and responsibilities, while Temu and Shein simply provide the digital storefront. This model allows the companies to distance themselves from the legal risks associated with warehousing and shipping. If a package triggers a tariff issue, the liability shifts more toward the seller than the platform. It’s a smart way to scale operations while reducing direct exposure to evolving trade policies.

Playing the Long Game with American Consumers

Temu and Shein are betting that U.S. consumers will continue prioritizing price and convenience over geopolitics. They know their low prices are hard to match, especially in an era of inflation and economic uncertainty. That’s why they invest heavily in marketing, offering steep discounts, viral social media campaigns, and influencer partnerships. By deepening consumer loyalty, they make it politically riskier for lawmakers to impose harsh restrictions that could alienate millions of shoppers. This strategy turns public demand into a soft shield against legislative pressure.

Preparing for a Legal Storm

Despite all these tactics, neither Temu nor Shein is taking the threat of legal action lightly. Ongoing investigations into their tariff practices, labor conditions, and trade ethics are ramping up on both sides of the Pacific. Legal teams are being mobilized, contingency plans are being drafted, and both companies are preparing for worst-case scenarios that could include fines, import bans, or forced restructuring. This isn’t just about surviving tariffs—it’s about protecting a global business model that’s built on tight margins and fast turnaround. The next few years could determine whether these companies remain dominant forces or face serious recalibration.

What Do You Think?

Temu and Shein are rewriting the playbook on how global e-commerce giants can operate under increasing trade pressure. Through a blend of legal maneuvering, supply chain innovation, data science, and public relations, they’re navigating a complex landscape that few companies are prepared to face. But their tactics aren’t without controversy, and they’ve drawn the attention of governments, competitors, and labor activists alike. As tariffs continue to evolve and political tides shift, it remains to be seen whether their current strategies are sustainable or simply temporary workarounds. The story of Temu and Shein is far from over, and its next chapter could have major implications for global trade.

What do you think about the strategies these companies are using? Share your thoughts or drop a comment below to join the conversation.

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Brandon Marcus

Brandon Marcus is a writer who has been sharing the written word since a very young age. His interests include sports, history, pop culture, and so much more. When he isn’t writing, he spends his time jogging, drinking coffee, or attempting to read a long book he may never complete.