Shein swings to $99m loss as Donald Trump’s tariffs hit sales
Shein said that it suffered a quarterly loss due to the slowdown in its sales after US President Donald Trump abolished the import tax exemption on small packages.
It also comes as uncertainty continues over the currently paused US-China tariff wars.
The fast fashion giant, headquartered in Singapore but founded in China, announced that it made a loss of $99 million (£74.1 million) in the first three months of the year. This compares with net income of $395 million the previous year.
Although the announcement was part of the firm’s preparations ahead of its listing in Hong Kong, the filing did not provide any details about the size, schedule or price of the planned initial public offering (IPO).
“In response to increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the U.S. market to offset some of the increased costs,” Shein said in the filing.
The company also said the Iran war has hit demand, increased costs and caused delivery delays in some markets.
The first-quarter figures also partially reflect a $328 million paper loss due to an accounting change for private investor stakes. Shares may later be converted into common stock and their value may change before listing.
By the end of March 2026, Shein had 281 million active customers (an increase of more than 16% from a year ago), placing more than one billion orders, the filing showed.
China Securities Regulatory Authority on July 10 The Commission (CSRC) approved the Hong Kong share sale to Shein after unsuccessful IPO attempts in New York and London.
The Hong Kong share listing is expected to take place in the coming months.
The figures show the impact of Trump’s executive order to end global tariff exemptions enjoyed by US low-cost goods customers.
This order, which took effect on August 29, 2025, expanded previous presidential action specifically targeting cheap products from China and Hong Kong to the rest of the world.
The so-called de minimis exemption allowed goods valued at $800 or less to enter the United States without paying any tariffs. US consumers took advantage of the exemption to purchase cheap products from online marketplaces such as Shein and Temu.
The White House said the global exemption was used to “avoid tariffs and divert deadly synthetic opioids to the United States.”
“The removal of the U.S. de minimis exemption had a negative impact on the overall growth of our sales and net revenues in the United States,” Shein said in the filing.
In early July, the European Union imposed a 3 euro (£2.56; $3.42) tax on low-value e-commerce imports.
The measure is intended to prevent what the trading bloc says is unfair competition from China.
