Shein’s Executive Donald Tang Optimistic About Affordable Clothing Amid Tariff Concerns
Shein, the popular online retailer known for its budget-friendly clothing, may not see a significant impact on its prices despite looming tariffs proposed by President Donald Trump. Donald Tang, the executive chairman of Shein, expressed confidence that the company can maintain its affordability as long as tariffs are implemented fairly and uniformly.
During an interview with CNBC’s Sara Eisen at the World Economic Forum in Davos, Switzerland, Tang emphasized the importance of affordability as a cornerstone of Shein’s business model. He stated, “Affordability is a big anchor. It’s the whole package of it, it’s a value for [your] money.” This reassurance comes as Trump had initially proposed tariffs as high as 60% on imports from China, where Shein predominantly manufactures its clothing, before softening his stance to suggest a 10% tariff instead.
Tang’s optimism hinges on the notion that Shein can remain competitive as long as China is not singled out for higher tariffs compared to other regions. Despite facing existing tariffs on imports from China, Shein has managed to avoid them by leveraging a trade law loophole known as the de minimis provision. This provision allows packages valued under $800 to enter the U.S. with minimal scrutiny and without incurring import duties and processing fees.
However, recent actions by the Biden administration aim to close this loophole by proposing new rules that would eliminate the exemption for products subject to U.S.-China tariffs. This move directly impacts companies like Shein and its competitor Temu, which have been key players in the surge of de minimis shipments in recent years. Surprisingly, Trump has endorsed Biden’s de minimis policy, as indicated by a trade memorandum issued during his first day in office, signaling a continuation of efforts to end these exemptions.
Shein’s trajectory has been marked by rapid growth and ambitious plans, including a potential U.S. initial public offering (IPO) that was ultimately abandoned in favor of a listing in London amid shifting political sentiments. While Tang refrained from commenting on the London IPO plans, he highlighted the benefits of being a public company, citing accountability and public trust as crucial elements for long-term growth.
In an industry where fast fashion reigns supreme, Shein’s ability to navigate potential tariff challenges while upholding its commitment to affordability underscores its resilience and strategic foresight. As the company continues to evolve and adapt to changing economic landscapes, its dedication to providing value-driven fashion remains unwavering, setting a precedent for sustainability and success in the competitive retail landscape.
