Supply Chain Report – 10/16/2025
Global fast-fashion giant Shein has issued a warning about growing uncertainty surrounding US tariff and import policy changes after reporting a decline in profits despite solid revenue growth in the past year.
According to newly released financial statements, Shein’s global revenues rose by 20% to $37 billion (£27.7 billion) in the last fiscal year. However, pre-tax profits fell 13% to $1.3 billion, down from $1.5 billion in 2023. The company attributed the drop primarily to rising marketing and operational costs.
The Singapore-based retailer—originally founded in China—has been expanding aggressively in global markets and is reportedly exploring a potential listing on the Hong Kong Stock Exchange after previous listing attempts in the US and UK did not move forward.
In its financial report, Shein highlighted that ongoing adjustments to US tariff policies have created a challenging environment for international businesses. The company noted that “the frequent evolution of trade policies has increased the level of uncertainties in the global economy,” and that future changes could impact its financial performance and operations.
A major factor affecting the company’s US trade has been the recent decision by the US administration to close a long-standing de minimis import exemption, which previously allowed goods valued under $800 to enter the country without certain customs checks or duties. This exemption, in place since 1938, was designed to support importers of small-value goods, including online marketplaces. Its removal has increased compliance and cost burdens for e-commerce retailers like Shein and Temu.
While Shein continues to generate revenue both from direct sales and fees charged to third-party marketplace sellers, analysts suggest that the tightening of US import rules could significantly affect the company’s American operations, which represent a key market for its low-cost apparel.
The company’s income tax payments remained steady at around $188 million, including $6.1 million in deferred taxes related to previous years. However, Shein’s UK operations drew attention from tax advocacy groups for allegedly shifting income to its Singaporean parent company to minimize its tax obligations.
Paul Monaghan of the Fair Tax Foundation criticized the company’s tax arrangements, citing that Shein has benefited from Singapore’s 5–8% corporate tax rate and associated relocation incentives, reportedly saving the company approximately $74.4 million in 2024.
Shein, however, denied the allegations, stating that it complies fully with international tax laws. In an official statement, the company said:
“The claim that Shein is avoiding tax is wholly false. Like any other international company, Shein pays all applicable taxes, including, but not limited to, VAT, corporate tax, and labor taxes, as required, and operates in compliance with the relevant laws and regulations of every market where we operate.”
The company did not issue a dividend in 2024, following a $484.5 million payout to shareholders the previous year.
Industry analysts note that while Shein continues to enjoy strong global demand, rising costs, regulatory scrutiny, and trade policy uncertainties in major markets such as the US could pose significant challenges to its profitability and planned public listing.
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