The US closed a loophole that helped Temu and Shein. Does that put local retailers back on a level playing field?
📦 Removed loophole: Duty-free shipping under US$800 was suspended and then indefinitely removed.
🛒 Back on equal footing: Undervalued US retailers still forecast to grow.
🧠 Which way does it cut?: A framework for whether regulation helps or hurts an industry.
Cheap factories are the obvious part of Temu and Shein's prices. Another part was a customs rule that allowed parcels under US$800 to enter the US duty-free. This involved shipping each order straight from China as individual items to skip the import duties every US retailer pays.
It arguably put Temu and Shein on the same footing as domestic stores, which could hand US retail its edge back. However, both are already adapting with US warehouses, and shoppers pay more either way.
Do local retailers actually get their edge back, or do Temu and Shein just adapt?