The administration's elimination of the so-called “de minimis” loophole has implications for businesses ranging from Etsy sellers to e-commerce behemoths.

The Chinese government has leverage over the two firms. Although Temu has grown quickly, PDD, its parent company, remains heavily dependent on its Chinese business, Pinduoduo. Shein does not sell its wares in the country, but it does rely on Chinese tech talent for its algorithm.