Shein warns of Trump tariff impact after posting quarterly loss

Key Points:

• Shein reported a $99 million loss in Q1 2026, attributing the decline from a $395 million profit in Q1 2025 to U.S. trade policies under the Trump administration that increased tariffs on Chinese imports.
• The removal of the de minimis exemption in May 2025 led to higher tax rates on Chinese-origin products shipped to the U.S., causing Shein's U.S. revenue to drop 14.3% to $2.04 billion in Q1 2026.
• To offset increased costs from tariffs, Shein plans to raise prices in the U.S. market while employing a cost-plus pricing strategy, though the company expects to pass most of the cost increases to consumers.
• The company also faces new challenges in the European Union, where a €3 fee on low-value e-commerce imports was introduced, potentially impacting Shein's revenues, as Europe accounted for about one-third of its 2025 revenues.
• Shein continues to confront criticism over labor practices, app features, and environmental impact but maintains a zero-tolerance policy on labor abuses and has invested in risk mitigation efforts.