Shein Swings to $99m Loss as Trump Tariffs Hit Sales

Sun Sep 06 2026 06:44:17 GMT+0000 (Coordinated Universal Time)

The fast‑fashion giant posts a $99 million quarterly loss after the US removes the $800 de‑minimis exemption, cutting U.S. sales and dampening its global outlook ahead of a Hong Kong IPO.

Shein’s first quarter of 2026 saw a sharp reversal, turning a $395 million pre‑tax profit into a $99 million loss as US tariffs were applied to low‑value packages. The change followed the Trump‑signed executive order eliminating the de‑minimis exemption that had enabled cheap imports of $800 or less. The company, which reported 281 million active customers and over one billion orders, now plans to increase US prices and explores other options. An accounting shift added a paper loss of $328 million. Shein is preparing for a Hong Kong initial public offering, after failing to list in New York and London.

Shein Swings to $99m Loss as Trump Tariffs Hit Sales

Shein, the Singapore‑based fashion retailer that was founded in China, announced a quarterly loss of $99 million (£74.1 million) for the first three months of 2026, a sharp contrast to a $395 million profit the prior year.

The setback follows the U.S. President’s removal of the de‑minimis exemption that allowed goods valued at $800 or less to enter the United States duty‑free. The executive order, which took effect on August 29, 2025, widened an earlier Trump action that had been targeted at cheap Chinese and Hong Kong imports.

Shein’s filing said the increase in tariffs and taxes had forced the company to consider price hikes in the United States to offset the cost rise. The U.S. market is where the bulk of Shein’s customers shop, and the exemption had been a key driver for low‑cost goods from e‑commerce sites like Shein and Temu.

The company also flagged a paper loss of $328 million stemming from an accounting change related to special investor shares that may be converted into ordinary stock in a future listing. In the year to end March 2026, Shein disclosed 281 million active customers who placed more than one billion orders.

Shein is preparing for a Hong Kong initial public offering – although the filing gives no details on timing, size or pricing – as it recently gained approval from the China Securities Regulatory Commission after failed attempts to list in New York and London. The listing is expected to occur within the next few months.

The company’s loss also reflects broader trade tensions. The U.S. cited the global exemption as a channel for “tax evasion” and the illicit transfer of synthetic opioids, while the EU introduced a €3 levy on low‑value e‑commerce imports in early July to curb what it terms unfair competition from China.

Read more about Trump’s executive order: click here and the EU levy: here.