has yet to see the full impact from the removal of the de minimis trade exception.

That’s expected to change, particularly when combined with the implementation of higher tariffs.

Katie Thomas, who leads Kearney Consumer Institute, believes there are several reasons why the combination of tariffs and de minimis has yet to result in a full impact on the footwear sector.

“To date, brands have been experimenting with different ways to manage the tariffs, from absorbing the costs to sending consumers a customs/tax bill after the fact,” she said. “The tariffs and exemptions are causing broader issues with supply chains and international shipping channels, likely leading to more costs for both brands and consumers.”

Thomas said the removal of de minimis will “disproportionately impact” smaller brands, as well as their online-only counterparts that were shipping directly to consumers from overseas. “Unfortunately, this will likely have an outsize impact on price-sensitive consumers that were buying these brands for their low price,” she said.

The consumer expert concluded that the resulting shifts “have the potential to reshape the mix of brands and products available in the U.S. market.”

Augustine Lo, a partner at the international law firm Dorsey & Whitney where he advises clients on U.S. customs and international trade law, said the end of the exception is “causing immense disruption for small and medium-sized businesses and individual consumers,” including e-commerce. He explained that parties to these low-value transactions now need to factor in import duties in their pricing, as well as deal with more burdensome import declarations.

“This change in government policy forces small businesses to behave more like larger companies, but potentially with less resources to meet that challenge. Many companies are reevaluating their operations in view of this new regulatory landscape,” Lo said. “Because consumers want bargains, many companies may choose to bite the bullet and incur the increased import costs if they could remain competitive.”

Shein and Temu

As for the price-sensitive consumers who were Shein and Temu fashionistas, transactional data from Consumer Edge US found that higher prices slapped on the fast-fashion sites due to skyrocketing tariffs resulted in those shoppers transitioning to other retailers. Those retailers included department store and specialty retailers, such as Bloomingdale’s, Kohl’s, Nordstrom Rack and Aéropostale. Also cited as beneficiaries were Gap Inc.’s Old Navy and Urban Outfitter’s apparel rental service Nuuly.

The higher prices were due to both U.S. President Donald Trump’s elimination in April of the duty-free de minimis treatment for shipments valued at $800 or less and the initial tariff rate of 145 percent on most China imports to the U.S. Although the tariff rate was put on a 90-day freeze to facilitate trade negotiations, there was still a 30 percent duty imposed during the freeze, which has since been extended for another 90-days through mid-November.

John Harmon, managing director, technology research for Coresight Research, told Footwear News in May that as consumers check out other retailers for low-cost options, the beneficiaries could be discounters and second-hand shopping.

Survey data from email and SMS marketing platform Omnisend last month found that two-thirds, or 66 percent of the 1,200 American adults polled, said they’ve noticed higher prices following the announcement of global tariffs. “Shoppers most commonly point to Amazon (39 percent), Temu (30 percent) and Walmart (27 percent) as places where they noticed a pricing shift,” the marketing platform said.

Omnisend’s e-commerce expert Marty Bauer said the impact won’t be felt all at once, but rather on a slower basis that, for most families, just means “less breathing room at the end of the month.”

“The impact comes in waves as new shipments arrive, which is why many people felt it first on the big marketplaces and will likely feel it later on at local stores,” Bauer said. “Even things made here, in the U.S., can increase in cost when imported parts or packaging get pricier.”

Two-thirds of those surveyed, or 68 percent, either reduced or moved away from Chinese marketplaces like Temu and Shein as the end of de minimis removed their price advantage, Omnisend data showed. That meant price increases were the No. 1 trigger to switch, with 34 percent of Americans surveyed citing it as the main reason for no longer shopping on Chinese marketplaces.

So, what would get them to start shopping again on the Temu and Shein platforms? Omnisend’s data showed 40.3 percent cited lower prices, while 37.8 percent said free or faster shipping. And despite the high costs due to tariffs, 43.2 percent in the third quarter update said they were willing to pay more for goods from the U.S., up from 40.1 percent of respondents in the first quarter’s survey.

But with the de minimis exception officially shut down on Friday, everyone — even those who began buying from Mexico (at 6.9 percent) or Canada (at 6.7 percent) as a workaround to dodge price shocks — will need to look elsewhere for their fashion and footwear needs.

Why de minimis shutdown is good

“The Trump administration has taken decisive action to close the de minimis loophole, a trade measure long exploited by Chinese e-commerce giants and other foreign shippers to circumvent U.S. trade laws,” said National Council of Textile Organizations president and CEO Kim Glas.

She noted that for years, companies have used the loophole to avoid tariffs and customs reporting requirements on shipments valued at $800 or less, which has devastated U.S. manufacturers, undercutted American jobs, and opened the floodgates to unsafe and counterfeit products and goods made with forced labor.

“The administration’s executive action closes this channel and delivers long overdue relief to the U.S. textile industry and its workers, while strengthening America’s economic and national security,” Glas concluded.