Meaghan Tobin

So I have a haul.

So I have a haul.

Are you guys going to miss the prices before the tariffs? Let me know in the comments.

Are you guys going to miss the prices before the tariffs? Let me know in the comments.

So clothing from Shein is so cheap in part because until a couple weeks ago, it could come into the United States without anyone having to pay any taxes on it, thanks to a tax loophole called the de minimis exemption. But that loophole has now been closed, which means customers in the United States are going to have to pay more to get their fast fashion clothes.

So clothing from Shein is so cheap in part because until a couple weeks ago, it could come into the United States without anyone having to pay any taxes on it, thanks to a tax loophole called the de minimis exemption. But that loophole has now been closed, which means customers in the United States are going to have to pay more to get their fast fashion clothes.

Yes. On Monday, President Trump issued an executive order saying that goods that previously would have come into the United States under this loophole will now be subject to tariffs of 54 percent.

Yes. On Monday, President Trump issued an executive order saying that goods that previously would have come into the United States under this loophole will now be subject to tariffs of 54 percent.

So this loophole is called the de minimis exemption, and it's basically Latin for it's too small to matter. And it started back in the 1930s when the U.S. government was trying to come up with a threshold for which it basically decided it was not worth the effort to collect taxes on imports under a certain value. Right.

So this loophole is called the de minimis exemption, and it's basically Latin for it's too small to matter. And it started back in the 1930s when the U.S. government was trying to come up with a threshold for which it basically decided it was not worth the effort to collect taxes on imports under a certain value. Right.

So in the 1930s, the de minimis exemption was a dollar, and the de minimis threshold was raised in the 90s as part of a wave of new trade policies worldwide that were based on the idea that more open trade would benefit everybody. And it was raised again to $800 in 2016. Wow, $800. I mean, that feels like a pretty high amount to not pay any tariffs on.

So in the 1930s, the de minimis exemption was a dollar, and the de minimis threshold was raised in the 90s as part of a wave of new trade policies worldwide that were based on the idea that more open trade would benefit everybody. And it was raised again to $800 in 2016. Wow, $800. I mean, that feels like a pretty high amount to not pay any tariffs on.

The thinking at the time was that this would help American businesses who relied on imported goods. And it really coincided with a period of time when online shopping took off around the world and also when the Chinese government was pushing businesses in China to find markets overseas. The Chinese government wanted China to be the world's factory.

The thinking at the time was that this would help American businesses who relied on imported goods. And it really coincided with a period of time when online shopping took off around the world and also when the Chinese government was pushing businesses in China to find markets overseas. The Chinese government wanted China to be the world's factory.

And so all of that really opened the floodgates into the United States for low-cost goods from China.

And so all of that really opened the floodgates into the United States for low-cost goods from China.

Yeah, Shein was one of those companies. And also Timu and Amazon and Walmart all took advantage of this loophole to send a lot of small, cheap packages to the United States from China. But it's Shein that really created an entire business model around it.

Yeah, Shein was one of those companies. And also Timu and Amazon and Walmart all took advantage of this loophole to send a lot of small, cheap packages to the United States from China. But it's Shein that really created an entire business model around it.

So when Shein first started drawing a lot of attention, people compared it to H&M and Zara, early models of fast fashion. But H&M and Zara, the way their business model worked is they would look at runway trends and order a bunch of clothes in advance and then ship it to warehouses in the United States in bulk. And Shein is totally different than that. It's not actually one single brand.

So when Shein first started drawing a lot of attention, people compared it to H&M and Zara, early models of fast fashion. But H&M and Zara, the way their business model worked is they would look at runway trends and order a bunch of clothes in advance and then ship it to warehouses in the United States in bulk. And Shein is totally different than that. It's not actually one single brand.