Founder’s Letter: The Insidious Loophole Making Fast Fashion Worse

I love stats. (My dear friend Mariette Hoitink once told me men are stats addicts.) One recent set of statistics I’ve been thinking about concerns fast fashion and import regulation. Did you know Temu and Shein and others deliver 4 million boxes of stuff to the USA each day? Did you know half of these boxes are apparel? Roughly speaking that’s 60 million boxes of garments per month or 720 million per year. Now, if each garment sells for $10 per piece (and that’s a low estimate), you’re talking about $7 billion worth of apparel subtracted from US /European retailers’ sales in the USA. Unlike Shein or Temu, these retailers, as “local business residents,” pay taxes and duties.

Let us all be clear what is going on. A hole in our import rules, called De Minimis Value,  allows companies from China (they could be anywhere, if they were as smart) to ship garments from their country to ours without paying duties. Target, Gap and Walmart all pay income taxes and duties.

What is not fair is all this business — all 720 estimated million pieces — is literally deducted from those of us in the fashion industry in the United States. Clearly, a piece of our market has been removed like four front teeth. We all simply have less business because of this loophole.

Worse, we have no real assurance that Shein’s products or Temu’s are made by factories that have any clear social compliance standards or safety protocols, nor do we know if there is any concern for the environment. And that’s before we even get to Xinjiang cotton.

While the US government is adamant to stop garments from containing Xinjiang cotton to be imported by US brands and retailers, they don’t care (or don’t seem to care) that these 720 million garments might contain the fiber we all have decided to ban.

It’s a crazy situation but these retailers overseas have found a loophole to beat our brains in on so many levels and we just stare at them as they do it.

Everyone in our industry has to tell their local and national politicians that this has to stop. We as an industry need to join hands and act like a team with “purpose.” Scream about the unfairness of this loophole anywhere you can, This needs to stop. Now. If not faster. 

You can write Alejandro Mayorkas the Secretary of the Department of Homeland Security at:

The Honorable Alejandro Mayorkas
Secretary of Homeland Security
Washington, DC 20528

Or you can email his department at FLETF.UFLPA.EntityList@hq.dhs.gov

– Andrew Olah