In early 2025, President Trump announced tariffs on imports from countries like Canada and China. This includes a significant 25% duty on goods from Canada and Mexico, impacting various industries, especially e-commerce.

New tariffs disrupt the business models of Temu and Shein by removing their tariff exemption on small packages. They're challenged with extra costs and supply issues, while Amazon might benefit from the shaken market.

Aimed at boosting American jobs and combating illicit drugs, Trump's strategic move closes the de minimis loophole. This formerly allowed goods valued under $800 to enter the USA without tariffs, favoring overseas retailers.

Temu and Shein succeeded by selling affordable fashion through smart supply chains, avoiding tariffs due to the de minimis exemption. Facing the new tariffs, they'll need new strategies to keep prices low and meet demand.

Without exemption, even low-value e-commerce imports face tariffs. This change raises costs for retailers, leading to costlier products for consumers, making competitive pricing a struggle for many in the e-market.

Higher tariff costs may reflect in increased product prices, affecting consumer spending. Companies like Amazon may gain as buyers search for cost-effective, reliable options amid market turmoil affecting Temu and Shein.

As tariffs take hold, possible retaliations and altering market dynamics loom. E-commerce shifts could favor Amazon while Temu and Shein look to innovate rapidly to maintain their U.S. market position.