LONDON – Shein and other fast fashion companies could be heavily impacted by new tax changes in the US, which could close a key loophole vital for their business models. Chinese fast fashion retailer Shein could find it more difficult to achieve its planned London listing, worth approximately £50 billion (€60.10), following US president Donald Trump’s plan to make a key tax change.

This move will involve potentially getting rid of a tax loophole that Shein has been significantly relying on, which is the de minimis exemption, a trade law that has been in place since 1930. The exemption applies to small packages, which are worth less than $800 (€771.6) and are shipped into the US from Canada, China and Mexico. Under this law, these packages can sidestep import taxes, as long as they are sent directly to home addresses or individual buyers in the US.  Shein and rival Chinese fast fashion company Temu both rely on this exemption, since currently, the majority of their US packages fall under this limit and are thus custom duty exempt. This has allowed them to be able to sell their goods at much lower prices in the US than domestic competitors. (Euronews)