Shein posted a $99 million loss after the end of the US tariff exemption

The fast-fashion giant posted a net loss of $99 million in the first quarter of 2025, compared to a profit of $395 million a year earlier. The elimination of a U.S. tariff exemption on small packages weighed heavily on its sales.

Shein released these results as part of its preparations for a Hong Kong IPO, following failed attempts in New York and London. On July 10, the China Securities Regulatory Commission (CSRC) gave its approval for the listing, expected in the coming months. The filing did not specify the timing, size, or price of the offering.

The first-quarter loss includes a $328 million accounting charge related to a change in the treatment of shares reserved for certain investors, the value of which may fluctuate prior to a potential listing. Excluding this effect, the operational deterioration remains significant.

The company identified the primary cause as the elimination of the so-called "de minimis" exemption, which until then had allowed American consumers to import goods valued at less than $800 without paying customs duties. Donald Trump initially targeted products from China and Hong Kong before extending the measure to the rest of the world through an executive order that took effect on August 29, 2025. The White House justified this decision by claiming that the exemption was being used to "circumvent tariffs and bring deadly synthetic opioids" into the United States.

“The removal of the de minimis exemption in the United States has negatively impacted our U.S. sales and overall net revenue growth,” Shein acknowledged in its IPO preparation document. To compensate, the company indicated it is considering “a wide range of options, including price increases in the U.S. market.”

Despite this challenging environment, Shein boasts 281 million active customers for the twelve months ending March 2026, representing a year-on-year increase of over 16%, with a total of more than one billion orders placed. The company, founded in China and headquartered in Singapore, also reports that the war in Iran is impacting demand, costs, and delivery times in certain markets.

The European Union, for its part, introduced a 3 euro tax on low-value online imports at the beginning of July, a measure intended to combat what it describes as unfair competition from China.