The change pressures dropshippers, such as eBay and Etsy sellers, and small importers.
The U.S. ‘de minimis’ exemption, which allowed tariff-free imports under $800, ended on Friday after nearly 90 years of being in effect, following President Donald Trump’s decision to scrap the rule.
Chinese e-commerce platforms Shein, Temu, and Alibaba Group Holding (BABA) were already impacted when the tariff exemption for packages from mainland China and Hong Kong ended on May 2. It subsequently ceased for the rest of the world on August 29.
The change pressures dropshippers, such as eBay (EBAY) and Etsy (ETSY) sellers, and small importers, while U.S. logistics firms, including Amazon (AMZN), Walmart (WMT), Prologis (PLD), and DHL, stand to benefit from reshoring demand.
According to a Bloomberg report, Shein and Temu raised prices for a wide range of products before the tariffs kicked in on May 2. It noted that the average prices of 98 products listed on Shein increased by more than 20% in the two weeks leading up to the May deadline. It also stated that Shein’s weekly sales fell by as much as 23% year-over-year in June, before recovering after the removal of the de minimis exemption. Temu’s sales dipped more than 33%.
Ahead of the August deadline, others, such as South Korean beauty brand Olive Young, have announced that they will be adding levies to orders placed from the U.S. Mail carriers in more than two dozen countries, including Australia, Singapore, and Norway, have temporarily suspended shipments to the U.S., stating that they need to collect additional data on how to handle the change in tariffs.
Ebay’s stock edged 0.5% lower in pre-market trade, after falling nearly 1% in the previous session. On Stocktwits, retail sentiment around the company remained in ‘neutral’ territory over the past day. Etsy’s stock edged 0.25% lower in pre-market trade, after dipping 1.03% in the previous session. However, retail sentiment around the company trended in ‘bullish’ territory over the past day amid ‘high’ levels of chatter.
However, Amazon and Walmart’s shares were also in the red during the pre-market, given weakness in the broader market ahead of the release of the personal consumption expenditure (PCE) data.
Meanwhile, BABA stock gained more than 3% in pre-market trade, after falling 2.18% during the previous session, despite a revenue miss in second-quarter earnings. Traders seemed more encouraged by the company’s profit growth, which came in at $5.9 billion, and its plans for AI.
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