Fast-fashion retailer Shein blamed Trump administration trade policies with China for a loss in the first quarter of 2026 in financial filings as the purveyor of ultra-cheap clothing prepares to go public.
Pre-IPO documents filed with The Stock Exchange of Hong Kong showed the company taking a $99 million loss in the first quarter of the year. The company made a profit of $395 million in the first quarter of 2025, according to the documents.
Founded in Nanjing, China, and headquartered in Singapore, Shein has found itself at the center of trade tensions between the United States and China. Trump ended the de minimis exemption, a trade loophole for low-cost imported goods, for imports from China in May of 2025.
The company said that the move has had an “adverse impact” on sales in its largest market.
Shein’s U.S. revenue fell 14.3% to $2.04 billion in the first quarter from $2.38 billion a year earlier. The United States accounted for 22.5% of quarterly revenue, down from 29.4% of annual revenue in 2023.
Shein said that Chinese-origin products sold directly from the company or through its marketplace and shipped to the United States are now subject to tax rates ranging from 10% to 87.5%. Before the Trump administration’s actions, those products were taxed 0% to 62.5%, according to the company.
“In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the U.S. market to offset a portion of the increased costs,” Shein said. “We expect to pass on the majority of the increased costs under our cost-plus pricing strategy.”
It also noted in the filing that the U.S. war on Iran has affected consumer demand in the Middle East and disrupted shipping routes in the Strait of Hormuz. But the company said the war “has not had and is not currently expected to have a material adverse impact on our overall business.”
The financial documents gave investors a look at the pressure facing Shein as it seeks new funds amid higher costs, slower growth, and growing regulatory scrutiny in key markets.
The European Union, a key market for Shein, also imposed a €3 fee on low-value e-commerce imports this month to curb what the bloc calls unfair competition from China. Europe accounted for about one-third of Shein’s revenues in 2025.
“Although it remains too early to fully assess, it is possible that trends in the EU could be generally in line with or exceed the impact observed in the U.S. after the removal of the U.S. de minimis exemption,” Shein said.
Shein has faced criticism from rivals, regulators and advocacy groups over issues including working conditions in supplier factories, allegedly addictive features of its shopping app, and the environmental impact of shipping large volumes by air.
Shein has said it has a zero-tolerance policy on labor abuses and has invested in risk assessments and mitigation frameworks to safeguard users.
Contributing: Reuters