To Offset Tariff Costs, Shein Said It Will Raise Prices In EU

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To Offset Tariff Costs, Shein Said It Will Raise Prices In EU

By

Roy Stephen Canivel

Roy Stephen Canivel

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Shein said it will raise prices in Europe to offset the costs of losing duty exemptions, among other tariff measures, as the Chinese e-commerce firm fears the market will suffer the same fate as the U.S., if not worse, filings showed.

It has been more than a month since the European Union effectively removed the customs exemption for orders with a real value of less than 150 euros per consignment, dealing a significant blow to Shein , since the market approximately accounts for a third of its net revenues.

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Moreover, since July 1, the bloc has been imposing a temporary three-euro customs duty on low-value parcels imported from outside the EU, an effort to help level the playing field which it said has been giving non-EU sellers an unfair advantage.

While Shein said in its filing that it is too early to say what this means for its overall sales in the EU, it acknowledged that these developments may have a “material adverse effect” on its business.

“Similar to the U.S. market, we expect to pursue a wide range of options in response, including increasing our prices in Europe to offset a portion of the increased costs, and there might be a short-term adverse impact on our sales volume in Europe as a result,” the filing read.

“Although it remains too early to fully assess, it is possible that trends in the EU could be generally in line with or exceed the impact observed in the U.S. after the removal of the de minimis exemption there,” it added.

The U.S., which accounts for around a quarter of Shein ’s revenues, removed the de minimis exemption last year, on top of imposing new tariffs on China and other countries. Since majority of the items sold by Shein in America were shipped from China, its products have become subjected to tax rates ranging from 10 percent to 87.5 percent—as opposed to zero to 62.5 percent when the exemption was still in place.

“Since May 2025, we observed a negative impact on our net revenues from the U.S. market in the remainder of 2025, while the long-term impact remains too early to fully assess,” Shein said, noting that it had to raise prices in the US to offset the costs.

“While our pricing is dynamic and subject to fluctuations, we expect to pass on the majority of the increased costs under our cost-plus pricing strategy, which sets the final price of our products by adding a markup to the total cost of production and distribution,” Shein added.

The ultra-fast fashion company is finding how fickle tariffs are as cost-cutting measures, especially in the current political climate where tariffs are treated as political and economic leverage. These tax measures in the U.S. and E.U. are already affecting its bottom line, with a $99 million net loss in the first quarter of 2026, filings showed, as opposed to the same quarter last year that had $395 million in profit.

Scrutiny from various regulators, including the U.S. Federal Trade Commission and the European Commission, are also adding pressure to an already delicate situation, given the roadblocks the Chinese company faced in pursuit of its IPO ambitions.

Shein tried but failed to go public in the U.S. in 2023 under the weight of immense political pressure. Then last year, its bid to go public in London was stopped by Chinese regulators. Now, the company sets its eyes on Hong Kong, this time with China ’s blessing. Reports say Shein could launch its IPO as soon as August 19.

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