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Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO), lauded the president for his decision to shutter the de minimis loophole. However, she also noted that the president should take his efforts one step further—at least where de minimis is concerned.

“We applaud the fact that the president’s announcement will essentially close de minimis on a global scale once the Secretary of Commerce puts the mechanism in place to collect duties on these imports. Half of de minimis shipments are estimated to be textile and apparel products, and NCTO has long called for the closure of this destructive loophole,” Glas said in a statement. “We encourage the full closure as soon as possible and stand ready to help the administration in any way to formulate plans for its effective implementation.”

So much of the reason that industry groups have called on Congress and presidents to shutter de minimis in the past has to do with “creating a level playing field.” That is to say, preventing e-commerce players like Shein and Temu from shipping direct-to-consumer orders into the U.S. without duties while other companies pay tariffs to import their inventory en masse.

And while de minimis’ closure will almost certainly drive up prices on marketplaces like Shein and Temu, experts aren’t so sure the China-founded e-commerce companies face real disadvantages.

Shein and Temu are ‘not paying any taxes day one’

Juozas Kaziukėnas, an e-commerce expert and entrepreneur, has long believed that suspending de minimis won’t magically cause Shein and Temu to fade into oblivion. He said that view hasn’t changed, despite Trump’s executive order.

“This is a big blow to them, but I still remain in the camp of thinking that these services don’t go away just because de minimis goes away,” he said.

Shein and Temu have starkly different business models; Shein uses on-demand manufacturing to make small runs of high-demand items and ship them directly to consumers in the U.S. from warehouses most often located in China, nearby factories. Temu, on the other hand, is solely a marketplace, and as such has come closer to mirroring the Amazon model: setting up local warehousing in the U.S. and other geographies to hold inventory closer to the consumer.

That in mind, experts project the suspension of de minimis will impact the two in different ways.

Rosenzweig said that Temu is likely to take a harder direct hit than Shein, primarily because Temu competes heavily with dollar stores with its rock-bottom prices. Shein, he argued, has the ability to raise the cost of its goods without consumers noticing as much.

“Every single penny difference in import duties will make a very big difference to [Temu’s] leverage,” he said. “I do think de minimis was a big advantage for [Temu], versus Shein, you can add two bucks to a dress, and you’re doing great—you’re still doing really well, you have room. Temu, you don’t have room.”

And while some legacy retailers have gone to their suppliers with requests to absorb some of the cost associated with tariffs, Kaziukėnas said that play is less likely to work for Temu and Shein, whose suppliers already have razor-thin margins.

“Compared to traditional retailers, these new services from China are a lot more aggressive to forego profitability in exchange for growing market share. I think something like Amazon or Walmart have a lot less room to absorb any increase in costs,” he said. “But something like Temu…has a lot more space to try to stay price competitive. But if prices increase across all retailers, then they can also increase on Temu and Shein and still be cheaper.”

Rosenzweig said that, while the playing field may now be more level—meaning that Shein and Temu will be required to pay the same duties as other retailers—their businesses may not see the catastrophic blow projected by some. That’s not just because of the low prices Kaziukėnas cited; it’s also because of what he calls “tax deferment”—effectively, only paying import duties when absolutely necessary, rather than paying them preemptively.

“Shein and Temu, their new financial advantages are tax deferment and agility, which means they’re keeping the goods near the factories, [so] they’re not paying any taxes day one. They sell the goods, and only when the goods are crossing the border are they paying those taxes,” he explained. “Instead of paying $1 million day one, you’re paying a few thousand dollars a day, after they’ve already collected it from the customer. Anything that’s excess inventory, you never pay taxes on that.”

That, Rosenzweig contends, still gives both firms—Shein in particular, since it’s even less likely than Temu to store items in U.S. warehouses—an advantage over their counterparts in traditional retail.

“Every other brand will still import goods through shipping containers, and you’re going to pay…import duties day one. That means you’re laying out all that money before you’ve sold a single pair of shoes,” Rosenzweig said. “Not only that—even when you sell your shoes over six months to slowly get that money back, almost everyone has excess inventory. That sucks—you paid 40, 50-percent duties. That’s lost money.”

Resale ‘woke up this morning feeling…pretty insulated’ 

Rosenzweig said that “every single brand in the world is going to have to raise prices” because of Trump’s trade crusade, and the stock market has taken a dive since Trump’s announcement.

But one CEO in the retail realm feels excited about what the current economic situation means for his business.

James Reinhart, CEO and founder of ThredUp, has long opposed de minimis—both because it allows goods made with synthetic fibers to flow into the U.S. with greater ease and because it, in his mind, creates “an unfair playing field.”

Reinhart said he’s not sorry to see de minimis go by the wayside and projects that de minimis’ closure and higher-than-expected tariffs could see resale becoming increasingly important to consumers. That’s because none of ThredUp’s shipments are subject to U.S. tariffs, nor has it been reliant on de minimis.

“With resale, everything we sell is sourced domestically; everything that we sell, we sell domestically,” he said. “I woke up this morning feeling like we’re pretty insulated from the impacts of the de minimis closure and broader tariff impact.”

And, like Burstein and Rosenzweig, Reinhart believes that, at least initially, consumers waiting on packages that would previously have been exempt from CBP processes could see delays. That, he contends, could also be a boon to ThredUp; since shipments from the resale company already sit inside the U.S., it will continue to process items with quick-turnaround shipping to its consumers.

That, paired with lower prices, could help ThredUp and other resale players compete with Shein and Temu, even if those companies retain their ability to compete on price.

“The double whammy on the de minimis [closure] will be, not just the increase in cost, but the increase in shipping times. Invariably, I think there’s going to be some delay in moving the volume of those goods through,” he said. “You can see a world where, not only are prices up, but shipping times are longer, and you can see consumers saying no to these products.”

Manish Chandra, CEO and founder of Poshmark, also wants to see the resale industry flourish; in an emailed statement, Chandra said he has faith that the peer-to-peer resale marketplace will become part of the solution for price-sensitive, resource-limited consumers.

“As the landscape of tariffs and imports evolves, we believe the secondhand marketplace will become an increasingly valuable and cost-effective resource for American consumers,” Chandra said. “Our platform enables individuals to not only find incredible value and pre-owned fashions but also to participate in the growth of circularity. By shopping from Poshmark closets or starting their own, consumers are supporting sustainability and helping strengthen the American economy.”

Smaller players could see mixed results

Some of the industry isn’t ready to celebrate just yet.

While Kaziukenas predicts that, for many legacy players, this iteration of de minimis collapse won’t have a negative impact, he said it will almost certainly negatively impact the individual sellers on low-cost marketplaces, as well as dropshippers.

And Rick Tate, CEO of MakeMine, which matches small apparel companies to manufacturers who can meet their needs, said that, in some cases, de minimis could see small companies facing some issues.

Tate said that, for apparel companies shipping small batches of product over for test runs with consumers—or for repeat ordering, de minimis shuttering could see prices on those goods rising.

Still, he said, the real trouble will come from the fact that most of his clients’ sourcing is concentrated in China because it’s the market that provides the most amenable minimum order quantities (MOQs) to smaller players.

While large players often have diversified sourcing networks—with suppliers in locations from China, to Vietnam, to Bangladesh, to Cambodia and others—small companies are less likely to manufacture in the latter locations. That means that, while CBP and the administration sort out what it would take to expand de minimis’ collapse to countries beyond China, large brands can still reap the benefits of de minimis shipping on goods coming from other countries.

That’s of particular note when considering that some brands and retailers ship high quantities of goods to third-party logistics companies near the U.S. border to be stored in warehouses. Once the goods are ordered by a consumer, they’re shipped as one-off packages into the U.S., both reaping the benefit of de minimis and of short-turnaround shipping.

Tate said his clients, in most cases, aren’t able to use that same process, because it’s not lucrative enough for the logistics providers; instead, small apparel companies are shipping their full orders into the U.S. to be stored and shipped by domestic providers. If further de minimis reform comes, Tate said, that could help put small brands and retailers at parity with their larger counterparts.

“These larger brands that were able to take advantage of, arguably a loophole that small businesses couldn’t have,” he said. “It somewhat evens the playing field.”