Shein IPO filing shows tariffs pressure U.S. sales and profit

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Shein IPO tariffs impact

Highlights

Shein's IPO filing reveals U.S. revenue drops over 3% year-on-year between 2024 and 2025, and Q1 sales fall 14% amid tariff hikes and the de minimis rule removal.
Shein companywide profitability declines 39% from 2024 to 2025, with a Q1 2025 loss of $99 million compared to a $395 million profit a year prior.
Regulatory shifts in Europe, ending duty-free status and imposing new fees in July, threaten 35% of Shein's 2025 revenue and may trigger price hikes, further risking sales volumes.

IPO filing details U.S. slowdown

As reported by CNBC, documents tied to Shein's planned Hong Kong initial public offering show the retailer's growth and profitability are being hit by higher import costs and the removal of the de minimis exemption in the U.S. Shein says it begins passing most of the added tariff costs on to shoppers in the U.S. from May 2025 through price increases, and that this hurts net revenue in the market during the rest of 2025.

Between 2024 and 2025, Shein's U.S. revenue declines by more than 3%, according to the filing. In the first quarter, sales fall 14% from the same period a year earlier. The company declines to comment.

Shein had long argued that trade law loopholes were not central to its success, but the filing indicates that the loss of those exemptions is now disrupting its momentum ahead of the IPO. The company is also dealing with higher costs after President Donald Trump closes the de minimis exemption by executive order and raises tariffs on goods imported from China.

Europe risks and business model shift

Europe, which accounts for 35% of Shein's revenue in 2025, is now emerging as another pressure point. The company warns that recent changes, including the end of duty-free shipping for low-value packages and new flat-rate fees, could have an even stronger effect there, and says it may also raise European prices to offset higher costs, with possible harm to sales volumes.

In July, the European Union ends its version of the de minimis exemption, which had allowed packages valued under 150 euros, U.S.$173, to enter duty-free. Companywide profitability falls 39% between 2024 and 2025, and in the first quarter Shein posts a loss of $99 million, compared with a $395 million profit in the year-earlier period.

Angela Lee, a professor of venture capital at Columbia Business School and founder of investment firm 37 Angels, says the regulatory changes pose a serious risk because Shein's model is heavily built around low prices. At the same time, Coresight Research CEO Deborah Weinswig says Shein could still find growth if it expands its supply-chain services, as the company works to broaden its third-party marketplace and commercialize what it considers a core operational strength.

Canada’s Standing Committee on International Trade is reviewing key pressures on the trade and investment environment, including disputes over U.S. tariffs, export strategy for clean energy and critical minerals, and enforcement of the import ban on goods made with forced labor. Our publication previously noted that Washington is also advancing a critical-minerals strategy built around new agreements and policy-backed financing to secure mining and processing supply chains, underscoring how trade rules and government action can quickly alter costs, sourcing, and access to major markets.

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