Shein, China's much-maligned fast fashion giant, is trying to reassure investors after US President Donald Trump's decision to end the de minimis regime, which exempted low-value imports from China from customs duties. The move could significantly impact the company's business model, as it prepares to go public in London.

In a letter to investors on Monday, Donald Tang, Shein’s executive chairman, stressed that “growth remains strong” despite the new regulatory challenges. The news, reported exclusively by Reuters, comes as the end of the de minimis regime has raised concerns about Shein’s ability to maintain its attractive pricing.

A model called into question

The Trump administration's reform eliminates a tax exemption that allowed US consumers to buy Shein items without paying customs duties on orders under 800 dollars. Some analysts say the move could force Shein and its main competitor, Temu (a subsidiary of PDD Holdings), to rethink their pricing policies.

Tang, however, claims that Shein remains competitive thanks to "advancements in the supply chain and improved logistics, ensuring faster and more reliable deliveries." However, the letter to investors does not provide any figures on the company's growth or current financial situation.

An uncertain context for Shein's IPO

The announcement comes as Shein prepares to go public in London. According to Reuters, citing three sources familiar with the matter, the group's valuation could be revised downward to around 50 billion dollars, compared to the 60 billion dollars initially anticipated. In a funding round in 2023, Shein was still valued at 66 billion dollars. A week ago, the company was still hoping to reach 50 billion dollars, but faced with pressure from investors, this figure could fall further to around 30 billion dollars.

Originally scheduled for the first half of 2025, the IPO is expected to be postponed to the second half of the year. This delay would give Shein some breathing room to adapt to current trade tensions and try to reassure investors in the face of growing uncertainties.

There is also uncertainty about how long this new tax policy will last. Donald Trump has finally temporarily reinstated the tariff exemption and tasked the Commerce Department with finding a suitable solution. No timetable has yet been specified.

Shein chairman supports de minimis reform

Despite these challenges, Tang reaffirmed his support for reforming the de minimis regime, a position he had already adopted in July 2023. “I have long advocated for reform of the de minimis regime that favors American consumers – because at Shein, our priority is the customer, not customs policy,” he wrote.

Shein's investors, including Sequoia Capital, General Atlantic, Declaration Partners, Brookfield and Claure Group, did not immediately respond to requests for comment from Reuters.

With a strategy focused on reducing costs and optimising its logistics, Shein is trying to adapt to a changing and deliberately restrictive regulatory environment, while reassuring markets about its ability to maintain its leading position in the low-cost fashion market in the US.

This article originally appeared on FashionUnited.FR. It was translated to English using AI.