The U.S. tax loophole that made Shein and Temu rich is changing. What will happen to the brands now? [Video]

For years, Shein and Temu used a U.S. tax loophole to keep their costs low and send items to the country ultra-quickly.

Not anymore.

U.S. President Donald Trump signed an executive order on April 2 to end the de minimis exemption — a rule that allows small packages worth less than $800 US to enter the U.S. tax free — for packages from China and Hong Kong, effective Friday.

The de minimis rule exists to prevent customs agents from spending too much time processing small packages that don’t yield much money for the government in import taxes. But now, the Trump administration is reversing the rule for imports from China, saying the exemption has allowed illegal drugs to come into the country. 

Companies like Shein and Temu, both of which were founded in China, have used the rule to their advantage, shipping orders to the U.S. as individual packages rather than bringing …