Fast fashion faces a reckoning as tariff loophole closes

Fashion United

2 days ago

For years, fast fashion has thrived on a global supply chain built for speed, scale and, most crucially, exemptions. But with the stroke of a pen, the US has redrawn the rules.
President Donald Trump's latest executive order, coming into effect on August 29, ends the de minimis tariff exemption for goods under 800 dollars, a loophole that enabled brands like Shein and Temu to ship low-cost clothing to American consumers free of import duties, reported the BBC. Once confined to China and Hong Kong, the policy now spans the globe, and with it, a new chapter begins for the business of ultra-cheap fashion.
The de minimis threshold effectively allowed online retailers to bypass traditional tariffs, using volume and velocity to flood the US market with disposable apparel at prices domestic brands could never match. Now, with those same parcels facing the full weight of country-of-origin duties, the economics shift dramatically.
The White House points to concerns over opioid trafficking and customs evasion, the BBC said, but the implications will be most acutely felt in fashion's lower rungs: the 5 dollar T-shirt, the 10 dollar dress, the two-week trend cycle that fuels an industry addicted to newness and price.
For American consumers, who have grown used to restocking wardrobes at the click of a button, price hikes may be inevitable. For platforms built on razor-thin margins and cross-border arbitrage, operations could change dramatically.
What happens next? Some brands may try to absorb costs or reroute supply chains; others will raise prices or perhaps rethink the model entirely. Hopefully, an ideological shift is underway: after decades of deregulated consumption, the end of the de minimis era is more than a policy change. It could be a signal that fast fashion's free pass may be over.