WASHINGTON (TNND) — Commercial ties with the nation's third-largest trading partner just got a lot more complicated and costly. President Donald Trump's imposition of a 10% tariff on Chinese goods is expected to increase costs for American consumers. In retaliation, China has announced tariffs on U.S. goods, set to take effect Monday.

When asked about China's retaliatory tariffs, Trump said, "It's fine. It's fine. We're going to do very well against China and against everybody else."

Another part of the president's executive trade action will affect Chinese online retailers like Temu and Shein, known for fast fashion and cheap products. Trump revoked a trade loophole called de minimis, which allows goods valued under $800 to avoid import tax.

“When we talk about de minimis in relation to companies like Shein, they’re supposed to report their imports into America in the aggregate and pay tariffs on them. Many companies do that. But they ship direct to consumer...Shein is making you, the consumer, in America, which is primarily, not exclusively, but primarily, young women and teenagers, the importer of record," Chapin Fay, executive director of advocacy group Shut Down Shein said in August 2023.

According to an executive briefing by the U.S. International Trade Commission in 2023, Chinese e-commerce sites, particularly Shein and Temu, have "exploited" this loophole in order to increase their U.S. market share.

"Shein has maximized the direct-to-consumer business model and it eclipsed leading U.S. firms in the category in 2022, with U.S. revenues growing from under $500 million in 2018 to over $3 billion in 2022. Temu’s business model also relies heavily on U.S. de minimis treatment," the memo said.

The de minimis change that took effect Monday may explain why Temu shoppers in the U.S. now see more items labeled as "local," indicating the product is stored stateside. Other items are likely to become more expensive as 10% import taxes are passed onto customers.

Companies that claim to have always adhered to the rules, such as Juul Labs, have welcomed the crackdown on de minimis.

"Over the past four years, criminals have used smugglers’ tactics to exploit this loophole and flood the U.S. with illegal Chinese vapor products, which now account for approximately 70% of the market. This key provision of the America First Trade Agenda empowers our law enforcement agencies to stop the flow of illegal Chinese vapor products and further secure our border," Juul Labs said in a statement.

The de minimis change caused temporary disruption at the U.S. Postal Service, which stopped accepting parcels from China and Hong Kong for several hours from late Tuesday into Wednesday. The USPS said it is now collaborating with Customs and Border Protection to manage the new tariffs with minimal service disruption.