America's trade war is coming for Gen Z's favorites

• Many Gen Zers purchase cheap goods from the Chinese e-commerce companies Shein and Temu.

• The Biden administration is taking steps to make more Chinese imports subject to import fees.

• This could make Shein and Temu more expensive for shoppers.

Two of Gen Z's favorite shopping platforms for cheap goods could get more expensive in the near future.

On September 13, the Biden administration announced it was taking steps to reduce the "abuse" of a trade law that has allowed the goods of many companies, including popular Chinese e-commerce companies Shein and Temu, to avoid taxes and tariffs when they enter the US. The trade provision, called "de minimis," allows US consumers to avoid paying these import fees on direct-to-consumer shipments of less than $800.

In fact, a House Select Committee report published last year estimated that more than 30% of packages shipped to the US under the de minimis provision came from Shein and Temu.

The administration's announcement included a new rule proposal that would remove this exemption for many Chinese imports, including most clothing products. These imports would become subject to import taxes and tariffs — potentially leading to higher prices for the many Americans who buy apparel, home decor, or electronics from the likes of Shein and Temu.

If Shein and Temu's costs rise, this could hit Gen Z the hardest. An estimated 40% to 45% of Shein and Temu's US customers are Gen Z, Chad Schofield, cofounder of the e-commerce logistics management platform BoxC, told Business Insider. He said he wouldn't be surprised if the proposal sparked some backlash among young Americans.

"Nineteen-year-old girls will scream bloody murder if it's going to be more expensive," he joked.

If the proposal goes into effect, a $40 Shein or Temu purchase, for example, could become roughly $50 once the new import fees are added — effectively a 25% increase — Schofield said. However, import fees could vary by product. Juozas Kaziukėnas, founder of the e-commerce intelligence firm Marketplace Pulse, told BI that many Shein and Temu products would likely face import fees between 15% and 20%.

The proposal aims to help protect American businesses and consumers from a rapidly growing number of imports. Over the last decade, the number of annual de minimis shipments has grown from roughly 140 million to one billion, and more of these shipments come from China than all other countries combined. In a fact sheet, the Biden administration said the rise in these shipments has made it more difficult for the US to enforce trade laws, protect consumers, and prevent illicit drugs like fentanyl from entering the country because these shipments face more lax customs inspections. There is also concern that competition from these low-cost imports is hurting US businesses that can't compete on price.