Shein has swung to a quarterly loss of $99 million, as US President Donald Trump’s removal of an import duty exemption on small packages slowed sales at the fast-fashion giant.
The company, which has its headquarters in Singapore but was founded in China, reported the loss for the first three months of 2026, compared with a net income of $395 million a year earlier.
The figures show the impact of a Trump-signed executive order to end a global tariff exemption that had been used by US shoppers of low-cost goods. The so-called de minimis exemption had allowed goods valued at $800 or less to enter the US without paying any tariffs. US consumers relied on the exemption to buy cheap goods from online sites like Shein and Temu.
The order came into effect on 29 August 2025.
The Tariff Impact
“The removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues,” Shein said in the filing.
The company also said it was “pursuing a wide range of options” in response to the increased duties and taxes, “including increasing our prices in the US market to offset a portion of the increased costs.”
The White House said the global exemption was being used to “evade tariffs and funnel deadly synthetic opioids” to the US.
Other Challenges
The first-quarter figures also partly reflected a paper loss of $328 million due to an accounting change for special investor shares. The Iran war had also hit demand, increased costs, and caused delays in some markets, Shein said.
Despite the challenges, Shein reported 281 million active customers in the year to the end of March 2026 — a rise of more than 16% on a year earlier — who placed a total of more than one billion orders.
Hong Kong IPO
The announcement is part of the firm’s preparations ahead of its stock market debut in Hong Kong. On 10 July, the China Securities Regulatory Commission gave Shein approval for a Hong Kong share sale after failed attempts to list in New York and London.
The filing did not give any details on the size, timetable, or pricing of the planned initial public offering. The Hong Kong share listing is expected to take place in the coming months.
Earlier in July, the European Union imposed a €3 levy on low-value e-commerce imports, a measure aimed at curbing what the trading bloc has said is unfair competition from China.
The Bottom Line
Shein swung to a $99 million quarterly loss after Trump’s removal of the de minimis tariff exemption slowed US sales. The fast-fashion giant is now preparing for a Hong Kong IPO after failed attempts to list in New York and London. The company faces additional challenges from the Iran war and a new EU levy on low-value imports.
