Shein slumps to loss as sales hit by Trump’s tariff blow

Shein has slumped to a loss as it revealed a sales hit from US President Donald Trump’s move to scrap an import duty exemption on small packages in an update ahead of its planned stock market debut in Hong Kong.

The fast fashion group reported bottom line net losses of 99 million US dollars (£74 million) for the three months to the end of March against profits of 395 million US dollars (£296 million) a year earlier.

Susannah Streeter, chief investment strategist at Wealth Club, said: “The powerful fast-fashion giant Shein has stumbled, facing a big hurdle from the removal of US import duty exemptions amid the wider tariff war.

“Shein, which was founded in China, lost $99m in the first three months of the year, compared with net income of $395m a year earlier.

“It’s another sign that the huge wave of ultra-cheap fashion flooding Western markets may start to lose power.

“The removal of the US de minimis exemption has taken away a huge competitive advantage, forcing the retailer to put up prices and absorb higher costs at the same time. That’s a difficult combination for a business built on razor-thin margins and impulse purchases.

“However, although the US and the EU have already acted to clamp down on low-value imports from fast-fashion giants, the UK is still playing catch-up.

“The government has brought forward plans to scrap customs duty relief on parcels worth less than £135, but the changes won’t come into force until October 2028.

“That’s left many major high street retailers frustrated that Britain continues to lag behind its biggest trading partners, allowing Shein and Temu to benefit from an advantage that has already been stripped away elsewhere.

“For years, high street chains have complained they are fighting with one hand tied behind their back, competing against overseas rivals able to ship low-value parcels into major markets without facing the same import costs.

“As governments chip away at those tax advantages, the playing field is beginning to look a little more level, even if the UK is in the slow lane in this journey.”