Chinese e-commerce and fast fashion platform Shein is reportedly expanding its production in Vietnam as it adjusts to a volatile US tariff regime. While US President Donald Trump recently reversed his decision to scrap the ‘de minimis’ rule, which exempted shipments worth less than $800 from customs duties, there is no assurance that it won’t be reimposed if infrastructure is put in place to collect duties.
The plans have been ongoing for a few months and involve the company offering incentives to its Chinese suppliers to shift some production to Vietnam, people familiar with the subject told Bloomberg. Some of these include higher procurement prices of 15-30%, assuring bigger orders and allowing for longer production times. However, the plans are still being discussed and are subject to change.
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The incentives are meant to be temporary, but the new locations will allow Shein to make use of the EU-Vietnam Free Trade Agreement, granting it access to major European markets.
The suspension of the ‘de minimis’ rule would have heavily affected Shein and Temu, another major Chinese e-commerce platform. A 2023 congressional report said the two companies were likely responsible for over 30% of tariff-free goods entering the US under the rule. If imposed, however, the suspension stands to benefit major American retailers like Amazon, which launched its “Haul” brand to compete with the low-cost products offered by the other two companies.
Jeff Bezos, Amazon founder and executive chairman, has allied himself with US President Donald Trump and was seen at the inauguration along other tech giants like Elon Musk, Sundar Pichai and Mark Zuckerberg.
Planned 25% tariffs on Canadian and Mexican goods were officially delayed for 30 days after both of the countries’ leaders negotiated concessions (limited ones) with the US President. The whole ordeal raised doubts about how seriously the world should take Trump’s tariff threats, with analysts saying a 10% tariff on Chinese imports was a light start.
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