Shein's £50bn London listing called into question after Trump tax clampdown

After months of speculation that Shein is planning a £50 billion blockbuster listing on the London Stock Exchange, President Trump’s promise to close a tax loophole may pose another hurdle for the fast fashion retailer.

Shein has been profiting from sending small packages from China to Western countries by utilising tax exemptions that mean that they do not have to pay import duties on small packages. This is known as the "de minimis" rule.

Over the weekend, President Trump promised to scrap the de minimis rule exemption for small packages worth less than $800 that are shipped from China, Canada and Mexico to the US.

President Trump's executive order suggests he is preparing for a tax clampdown. This could see Shein face hundreds of millions of dollars in additional import duties, given the vast majority of its US sales are shipped in small packages.

In recent months, the UK has also turned up the pressures on overseas retailers, such as Shein and Temu, who ship directly to Western countries from China in small parcels rather than creating fulfilment centres on UK soil. This means that they do not have to pay import duties as packages worth less than £135 avoid tax. Shipments greater than £135 can incur customs duties of up to 25%.

Commenting on the tax 'loophole', a spokesperson for Shein said: "Shein's success comes from our ability to produce fashionable products for our customers. We keep prices affordable through our on-demand business model and flexible supply chain. This reduces inefficiency, takes out wastage of material, and lowers our unsold inventory. We pass this advantage to our customers, and this has driven our success around the world, not the exemptions that retailers receive under current tax regimes."

Investors expected to buy shares in the company when it lists will want assurances about the reliability of the company’s forecasts, something that will be difficult to offer given the uncertainty over tax changes and their impact on sales.

Neil Saunders, of GlobalData, told The Telegraph that the removal of the de minimis benefit was “potentially very disruptive”, adding that it had “the potential to dampen investor sentiment”.

Although the full scope of the tax changes aren't clear, Shein has been diversifying where it ships from.

In August 2024, it began eyeing opening its first UK-based warehouse. The Singapore-based retailer began scouting sites in Midlands' 'golden logistics triangle' (an area known for its logistics and warehousing facilities), according to This is Money. Representatives have been hunting for sites between 300,000 and 600,000 sq ft across Derby, Daventry, Coventry and Castle Donington.