The End of Fast Fashion?

Summary

Podcast Summary: The Daily – "The End of Fast Fashion?"

Episode Overview In the May 15, 2025 episode of The Daily, hosted by Katrin Benhold of The New York Times, the discussion centers on the potential demise of fast fashion, particularly focusing on the impact of recent policy changes on companies like Shein. Co-host Megan Tobin joins Katrin to explore the intricate dynamics between government regulations, global manufacturing, consumer behavior, and the future of the fashion industry.

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1. The Rise and Dominance of Fast Fashion 00:24 – 02:05

Katrin Benhold sets the stage by highlighting the affordability and accessibility that fast fashion brands like Shein have historically offered to American consumers. She remarks, "For years, American consumers have been able to spend next to nothing on the latest fashion trends" (00:32). Megan Tobin adds a personal touch by recounting the allure of low prices: "I might be the over consumption final boss because I keep buying the same things, just different colors and different fonts" (01:01).

Key Points:

• Shein’s business model allows consumers to purchase trendy clothing at minimal costs.
• The company's pricing strategy makes fashion accessible to a broad audience, especially budget-conscious shoppers.

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2. Understanding the De Minimis Exemption 02:05 – 05:08

Megan Tobin delves into the technicalities of the de minimis exemption, a pivotal policy that allowed companies like Shein to ship goods into the U.S. tax-free. She explains, “This loophole is called the de minimis exemption, and it's basically Latin for it's too small to matter” (03:42). Katrin questions the rationale behind the high exemption threshold, to which Megan responds, “The thinking at the time was that this would help American businesses who relied on imported goods” (04:39).

Key Points:

• The de minimis exemption originated in the 1930s and has evolved, recently being set at $800 in 2016.
• This exemption facilitated the influx of low-cost goods from China by eliminating the need for taxes on small-value imports.
• The closure of this loophole marks a significant shift in U.S. trade policy aimed at leveling the playing field with Chinese manufacturers.

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3. Shein’s Innovative Business Model 05:08 – 07:38

Katrin and Megan explore how Shein revolutionized the fast fashion industry. Megan notes, “Shein is totally different than that. It's not actually one single brand. It's an online marketplace that sources from a network of thousands of Chinese factories” (05:13). She emphasizes the company's ability to adapt swiftly to fashion trends, branding it as "ultra fast fashion" as opposed to traditional fast fashion models.

Key Points:

• Shein operates as an online marketplace rather than a conventional retail brand.
• The company leverages a vast network of factories to produce a constant stream of new garments, responding in real-time to emerging trends.
• This model minimizes inventory costs and maximizes responsiveness to consumer demand.

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4. The Impact of Tariffs and Policy Changes 07:38 – 09:15

The discussion shifts to the recent executive order by President Trump, which imposes a 54% tariff on goods previously exempted under the de minimis policy. Katrin summarizes, “He could pause or reverse his position on closing the loophole altogether” (18:56), hinting at the potential volatility in policy decisions. Megan explains the immediate repercussions: “Anything you buy from Shein that's coming from China will cost more and could mean that people will buy fewer things” (19:03).

Key Points:

• The new tariffs significantly increase the cost of Shein’s products in the U.S., directly affecting consumer prices.
• This policy aims to rectify perceived unfair trade practices and reduce the trade imbalance between the U.S. and China.
• The increased costs may lead to reduced consumer spending on fast fashion items.

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5. Ground Realities in Guangzhou’s Garment Industry 09:15 – 17:08

To provide a comprehensive view, Megan Tobin recounts her visit to Guangzhou, the epicenter of China’s garment manufacturing. She describes the city’s sprawling, assembly-line-like factories: “It's like a sort of supercharged Ford assembly line spread over an entire city” (14:04). Interviews with factory owners and workers reveal significant challenges, as orders from Shein drop by nearly 20%, leading to reduced hiring and potential relocations: “Shein was putting in fewer orders in anticipation of the loophole being closed” (16:13).

Key Points:

• Guangzhou's garment factories are integral to the global fast fashion supply chain, employing millions.
• The closure of the de minimis exemption has led to decreased orders, threatening factory operations and employment.
• Factory owners are seeking alternative markets in Europe and South America to compensate for the loss of U.S. consumers.

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6. Broader Economic and Cultural Implications 17:08 – 21:33

Katrin and Megan discuss the broader implications of diminishing fast fashion access, touching on environmental concerns and shifts in consumer culture. Megan posits, “Our relationship with consumption is fundamentally unhealthy” (22:59), advocating for more sustainable practices like secondhand fashion. The conversation also addresses the skepticism surrounding the promised economic benefits of such trade policies, with Megan noting that “Very few economists believe that it will actually create a significant amount of the kind of middle class manufacturing jobs that President Trump has been promising” (21:07).

Key Points:

• The potential decline of fast fashion raises questions about sustainability and the environmental impact of overconsumption.
• There is a cultural push towards minimalism and intentional consumerism, challenging the previously rampant buying habits fostered by fast fashion.
• Economically, the expected resurgence of domestic manufacturing has yet to materialize, casting doubt on the long-term benefits of the policy changes.

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7. Future Outlook and Consumer Adaptation 21:33 – 23:45

In the concluding segment, Katrin reflects on the possible future scenarios post-policy change. Megan suggests that the end of ultra cheap fashion might lead to a “reset our relationship with consumption and material goods” (23:47), hinting at a potential societal shift towards more mindful purchasing behaviors. Katrin adds, “If you are the type to buy a new outfit for every date night, every girl's night out, every vacation, stop” (23:12), encouraging listeners to adopt sustainable fashion practices.

Key Points:

• The policy changes may catalyze a significant shift in consumer behavior, promoting sustainability over disposable fashion.
• There is a growing movement advocating for reduced consumption and increased awareness of the environmental and social impacts of fast fashion.
• The fashion industry may witness a transition towards more sustainable and ethically produced clothing as a response to both policy changes and evolving consumer preferences.

---

Conclusion

The episode of The Daily titled "The End of Fast Fashion?" provides an in-depth analysis of the intricate web connecting government policies, global manufacturing, and consumer behavior. Through engaging dialogue and on-the-ground reporting, Katrin Benhold and Megan Tobin shed light on the imminent challenges facing the fast fashion industry and provoke thoughtful consideration of our consumption habits and their broader implications.

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Notable Quotes:

• Megan Tobin (02:53): “So clothing from Shein is so cheap, in part because until a couple weeks ago, it could come into the United States without anyone having to pay any taxes on it, thanks to a tax loophole called the de minimis exemption.”

• Katrin Benhold (03:19): “It's $18 now. They were in plain and prices are going up.”

• Megan Tobin (05:35): “Shein mails their items directly to customers.”

• Katrin Benhold (16:10): “I mean, she clearly understands the American teen market.”

• Megan Tobin (22:22): “Perhaps we need to start taking responsibility.”

• Katrin Benhold (23:12): “If you are the type to buy a new outfit for every date night, every girl's night out, every vacation, stop.”

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Final Thoughts

This episode underscores the fragile interdependence between global trade policies and consumer-driven markets. As regulations evolve to address economic disparities and ethical concerns, both consumers and producers must navigate the resulting shifts with adaptability and foresight.

Transcript

[Megan Tobin]

This message comes from Capital One. Your business requires commercial banking solutions that prioritize your long term success with Capital One. Get a full suite of financial products and services tailored to meet your needs today and goals for tomorrow. Learn [e-mail] Commercial Member FDIC hey everyone. So I have a haul.

[Katrin Benhold]

From the New York Times. I'm Katrin Ben Holt. This is the Daily.

[Megan Tobin]

Y' all. This box is so heavy. Like they had $1 shirts, $2 shirts, $3 shirts, $5 dresses.

[Katrin Benhold]

Like it was ridiculous. For years, American consumers have been able to spend next to nothing on the latest fashion trends.

[Megan Tobin]

So for a sweatshirt, a T shirt and a tank top, the total was $14.82 off of shein.

[Katrin Benhold]

If you want to be a baddie on a budget, Shein is the way to go. Thanks in large part to to Chinese clothing companies like Shein.

[Megan Tobin]

I might be the over consumption final boss because I keep buying the same things, just different colors and different fonts.

[Katrin Benhold]

That have long used a loophole to send millions of packages a day into the US From China tax free. But now Shein and these new prices got me looking like what the President Trump is killing that loophole even as he de escalates his larger trade war with China.

[Megan Tobin]

A dress I had in my car was like $9.

[Katrin Benhold]

It's $18 now. They were in plain and prices are going up.

[Megan Tobin]

What if like prices just like never go down? Like what if I could never get a mini skirt for $7 ever again? Like I'm scared.

[Katrin Benhold]

Today I talk with my colleague Megan Tobin about whether this might be the end of fast fashion. It's Thursday, May 15th. Are you guys going to miss the.

[Megan Tobin]

Prices before the tariffs? Let me know in the comments.

[Katrin Benhold]

Megan, welcome to the show.

[Megan Tobin]

Thanks for having me.

[Katrin Benhold]

So I know you've been reporting on Shein and other fast fashion companies for many years, but I can reveal to you that I am also an expert on the subject because I have a teenage daughter who spends a lot of her time in pocket money on Shein. And I did my research before coming on today and asked her about her latest haul.

[Megan Tobin]

Tell me what she bought.

[Katrin Benhold]

So she got a lot of things. Wait for it. She got a bikini for $5, a jewelry box for $2.60, a phone case for $2, a tube top for $2, a couple of tank tops for $4 each, a claw clip for just under a dollar, and I think the single most expensive thing on her receipt was actually a pair of jean shorts for like $6. It's kind of Insane.

[Megan Tobin]

That sounds like a classic Shein haul.

[Katrin Benhold]

And I'm really wondering, how can they keep it this cheap?

[Megan Tobin]

So clothing from Shein is so cheap, in part because until a couple weeks ago, it could come into the United States without anyone having to pay any taxes on it, thanks to a tax loophole called the de minimis exemption. But that loophole has now been closed, which means customers in the United States are going to have to pay more to get there fast fashion.

[Katrin Benhold]

And it's still closed even though China and the US Passed their super high tariffs earlier this week.

[Megan Tobin]

Yes. On Monday, President Trump issued an executive order saying that goods that previously would have come into the United States under this loophole will now be subject to tariffs of 54%.

[Katrin Benhold]

Okay, so let's talk about this loophole. What is it?

[Megan Tobin]

So this loophole is called the de minimis exemption, and it's basically Latin for it's too small to matter. And it started back in the 1930s when the US government was trying to come up with a threshold for which it basically decided it was not worth the effort to collect taxes on imports under a certain value. So in the 1930s, the de minimis exemption was a dollar. And the de minimis threshold was raised in the 90s as part of a wave of new trade policies worldwide that were based on the idea that more open trade would benefit everybody. And it was raised again to $800 in 2016.

[Katrin Benhold]

Wow, $800. I mean, that feels like a pretty high amount to not pay any tariffs on. What was the justification for letting this threshold be this high in the United States?

[Megan Tobin]

The thinking at the time was that this would help American businesses who relied on imported goods. And it really coincided with a period of time when online shopping took off around the world, and also when the Chinese government was pushing businesses in China to find markets overseas. The Chinese government wanted China to be the world's factory. And so all of that really opened the floodgates into the United States for low cost goods from China.

[Katrin Benhold]

And let me guess, Shein was one of the companies that took that opportunity and ran with it.

[Megan Tobin]

Yeah, Shein was one of those companies. And also Temu and Amazon and Walmart all took advantage of this loophole to send a lot of small, cheap packages to the United States from China. But it's Shein that really created an entire business model around it.

[Katrin Benhold]

So let's talk about that. What does this entirely new business model look like?

[Megan Tobin]

So when Shein first started drawing a lot of attention, people compared it to H and M and Zara early models of fast fashion. But H and M and Zara, the way their business model worked is they would look at Runway trends and order a bunch of clothes in advance and then ship it to warehouses in the United States in bulk. And Shein is totally different than that. It's not actually one single brand. It's an online marketplace that sources from a network of thousands of Chinese factories. And instead of having specific collections for the time of year, they're just constantly creating thousands of different garments every day. And Shein responds essentially in real time to trends. They have this proprietary system that allows them to place really small orders with really short turnaround times with their suppliers. That enables Shein to avoid the cost of maintaining a lot of inventory. And unlike Zara or H and M, who ship their clothes in bulk to warehouses in the United States, who then distribute it to shops, Shein mails their items directly to customers. And what's interesting is that because of their proprietary system, they can see how things are selling on the app and quickly notify suppliers that they need to make more. So, so sometimes when you buy something on Shein, it might not actually even have been made yet. Wow. And so if all of a sudden everyone in your TikTok feed is wearing baggy cargo pants or lime green crop tops, immediately, you can also see those being offered on Shein. And if more people start buying them, the platform can quickly ask more suppliers to keep making them. That enables them to offer a huge variety of products on their app for very little money. So instead of fast fashion, it's more like ultra fast fashion.

[Katrin Benhold]

Yeah. It is kind of crazy. You see something on TikTok and before you know it, it's delivered directly to your doorstep and for, like, no money. It's a little bit like consumerism on steroids or something.

[Megan Tobin]

Totally. And Shein is not without its critics. There are all kinds of concerns about Shein and Ultra Fast Fashion. There are concerns about labor practices at some of the factories that supply for Shein. And of course, there are environmental concerns because millions of packages are being flown across the world every day. And because the prices are so low, it makes the clothes feel almost disposable. And in the United States, a lot of businesses were angry that Shein and other companies were using this loophole and not paying any taxes. They felt that was really undercutting their prices. Like, for example, Forever 21 partly blamed shein and Temu and their use of the de minimis exemption when it filed for bankruptcy earlier this year. And all of that concern eventually reached the White House.

[Katrin Benhold]

It plays right into President Trump's narrative about China ripping off the United States.

[Megan Tobin]

It absolutely plays into President Trump's narrative that, particularly when it comes to trade, the playing field with China has not been even. And Trump also says the de minimis exemption was leading to fentanyl and the chemicals that are involved in making it coming into the US From China because he said drug traffickers were taking advantage of the limited checks on these packages to sneak illegal substances into the country. And all of this is why earlier this month he got rid of the.

[Katrin Benhold]

Loophole, which is bad news for all the Americans who've become used to paying next to nothing for these clothes. Right, but it sounds like it could be existential for companies like Shein and all the people who make the clothes.

[Megan Tobin]

Yes, which is why I went to Guangzhou, a city in the Southeast that is in many ways the heart of the global garment industry. It's where many of Shein's halls are made, and I wanted to go there to see what the end of this loophole means for the millions of people who work in this industry, and ultimately what it means for the fate of Fast Fashion.

[Katrin Benhold]

We'll be right back.

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[Katrin Benhold]

So, Megan, you're actually talking to us from China. You're in China. Tell us about your recent trip to Guangzhou. What did you see?

[Megan Tobin]

So the thing you need to know is that China makes nearly one in every three garments sold around the world.

[Katrin Benhold]

Wow.

[Megan Tobin]

And much of that comes from Guangzhou in the factories that are part of the Shein network. And in a lot of ways, this city is really the global hub of garment manufacturing. And I wanted to see what the impact of the end of the de minimis loophole was going to be on the ground here. So my colleague Si Zhao and I went to Guangzhou to check it out. Many of the garment factories in Guangzhou are essentially open air workshops. They're like big warehouses with garage doors that open onto the the street, and they're full of sewing machines that are clacking away at all hours of the day and night. And different workshops have different functions. So some places might assemble whole garments and other places will just sew on zippers and ruffles. And one of the places that we went was a labor market for day laborers. This kind of informal market where a lot of the workshops go to recruit their labor for the day. And hundreds of managers from different factories were lined up on the sidewalk looking for people to do different sewing tasks all day long. So some places are putting together the main seams of a garment, and then down the street is a place that will sew in the zippers and another one that will do the elastic waistband. And then there's a different company that will come and pick up the packages and bring them to a collection point. So all over the city, you can see trucks that are piled high with rolls of fabric just rocketing down the street. And at the same time, they're being passed by guys with carts and in driving vans who are collecting the finished products and taking them to the airport. So there's this whole ecosystem of businesses that are all interconnected in the task of making clothes as quickly as possible.

[Katrin Benhold]

So it sounds like it's actually a very sophisticated operation, almost like a sort of supercharged Ford assembly line.

[Megan Tobin]

If you can imagine that assembly line, like, spread over an entire city, that is essentially what it is like. So you've got just whole neighborhoods that are geared toward the production of clothes. And this industry is a really important part of the economy there. It employs millions of people, and a lot of them are migrant workers who come to the city from all over China. So we talked to managers and workers, and what they told us is that business was already down in the month of April, Shein was putting in fewer orders in anticipation of the loophole being closed. And because of that, factories were hiring fewer workers. Some people said they were considering moving their factories to other provinces where they thought they could pay workers less or even out of the country to places like Vietnam. And many of the people we spoke to had actually seen nearby businesses close down. Now, we were in Guangzhou on the day the loophole closed, and one of the people that we talked to was Han junxo. Junxo is 30 and she is a second generation factory owner and she makes house slippers and bags and other accessories and she sells them on Shein and Timu. And one of her most popular products is a pair of fluffy socks she markets as being for pajama parties and girls nights. And she was telling us how she gets inspiration for her colorways by looking at the colors of outfits that Kendall Jenner posts on Instagram. Kendall Nicole.

[Katrin Benhold]

I mean, she clearly understands the American teen market.

[Megan Tobin]

Absolutely. But that's so cute. I totally, totally fine. But Juncho says that her orders in April were down nearly 20% compared to previous months. And she's already starting to look for other markets to make up for the loss of American consumers.

[Katrin Benhold]

How's she going to do that?

[Megan Tobin]

Well, if Americans aren't going to buy things because they're more expensive, Jen show is going to have to sell her fluffy socks and bags in other places. So she's looking to Europe and South America. And that's something we heard from other business owners too. There are all these chat forums online that are almost offering like crowdsourced tech support, teaching people how to set up an account in Bahasa Indonesia to target Indonesian customers or what buttons to click to get set up to sell on Mercado Libre in South America.

[Katrin Benhold]

But I imagine it can't be that easy to replace the American market because American consumers just seem to buy so much more stuff than anyone else.

[Megan Tobin]

That's right. The US Is China's biggest single market. It's a big economy with a lot of consumers who have enough disposable income that they can buy reusable water bottles and strollers and toasters and flash drives and basically anything need or want from China. So on top of looking abroad for other markets, factory owners like Juno are also trying to target shoppers in China. And the Chinese government really needs this to happen because the economy has been pretty slow in the last couple of years and exports have really been the main driver of growth. But the problem is people in China have been really careful about spending money. And Jun Cho ultimately sees this as a lose, lose situation. She thinks that not only are Chinese manufacturers going to suffer, but American shoppers are going to also. She said that China makes so much stuff. If you cut out China, where are you going to be able to buy all your products? And she definitely thinks people in the US Won't be able to replicate manufacturing the way that Guangzhou has. That there was no way that Guangzhou wasn't going to be the engine of the global garment industry.

[Katrin Benhold]

And if she's right, that America can replicate the system and bring that kind of manufacturing to the US that basically means the end of this ultra cheap clothing for Americans.

[Megan Tobin]

Well, President Trump could change his mind. He could pause or reverse his position on closing the loophole altogether.

[Katrin Benhold]

Yeah, that has happened before.

[Megan Tobin]

Exactly. He's rolled back the tariffs from an additional 145% down to 30%. But that's for most goods coming from China. For the packages that we're talking about, which previously entered the United States without paying any taxes, now they'll be subject to either a tariff of 54% or a flat fee of $100. And more than likely, it's the shopper who will end up paying that extra cost. So that means anything you buy from Shein that's coming from China will cost more and could mean that people will buy fewer things. And a Shein haul might become a little bit more of a mini haul.

[Katrin Benhold]

And some people might not be so unhappy about that. Right. I mean, it sort of raises these bigger questions about our consumer culture. We've gotten so addicted to all this cheap stuff. And there is this question kind of elephant in the room, you know, would we be better off if there was less stuff? And I guess I'm wondering, who's this going to hurt more long term, China.

[Megan Tobin]

Or the U.S. i mean, that's a big question at the heart of the trade war right now. It's really difficult to say. Like I said, China is an export driven economy. And this trade war is really bad news for the one area that had been driving growth. But it's also not just a place of manufacturing, it's also a place of innovation. China is quickly becoming a leader in other technologies. In many ways, pushback from the US just pushes China to become more self sufficient in many areas. And we can see that happening in semiconductors and artificial intelligence. And so it might just be that the garment industry is one of the next places where that happens. And in the end, this could accelerate the shift that the Chinese government hopes it would to helping China become a more consumption driven economy.

[Katrin Benhold]

And how about the U.S. there are.

[Megan Tobin]

Several things to consider. This is definitely going to hurt the United States in pure economic terms. Very few economists believe that it will actually create a significant amount of the kind of middle class manufacturing jobs that President Trump has been promising. And like I said, things will definitely get more expensive and that means Americans will likely buy fewer things.

[Katrin Benhold]

And the President himself does not actually dispute this. In fact, he seems to be actively embracing it. Remember when Trump recently said that thing about American kids don't need to have 30 dolls, maybe they can just have two or three? What do you make of that?

[Megan Tobin]

Yeah, that's the story he's telling. And it's a position that extends to some of his administration too. Scott Bessant, the Treasury Secretary, said something really similar. That the American dream is not about having access to cheap stuff. It's about prosperity and upward mobility and economic security. And that for too long the people making the trade deals have lost sight of this.

[Katrin Benhold]

So he's kind of reframing this all as a good thing, that we'll be breaking a bad addiction to cheap stuff we don't need.

[Megan Tobin]

Right. And what's interesting here is that even people who are skeptical of Trump's tariffs might be in favor of rainy and fast fashion for environmental reasons or because they're against overconsumption. And you can actually see that playing out online. We need to stop filling up our closets and fill up our banks. There's this whole buy less movement.

[Katrin Benhold]

We're not rich enough to afford these tariffs. So let's embrace the idea of underconsumption.

[Megan Tobin]

Maybe we need to start taking responsibility.

[Katrin Benhold]

For how much textile waste is in landfills in other countries.

[Megan Tobin]

Our relationship with consumption is fundamentally unhealthy and people cannot stop buying stuff on TikTok alongside the massive shein hauls, you can also see people having conversations about consuming less.

[Katrin Benhold]

If you are the type to buy a new outfit for every date night, every girl's night out, every vacation, stop.

[Megan Tobin]

Your last outfits slayed, wear those again. And being more intentional about where they're buying things from. If there was ever a time to develop an interest in secondhand fashion, I swear now is the time. So the end of the de minimis loophole might result in something that a lot of people agree with, making fast fashion a little harder to buy.

[Katrin Benhold]

I hope that all of this will.

[Megan Tobin]

Just reset our relationship with consumption and material goods.

[Katrin Benhold]

It could be wishful thinking, but that.

[Megan Tobin]

Is one potential benefit of all this.

[Katrin Benhold]

I think I need to introduce my daughter to some of those other TikTok channels.

[Megan Tobin]

Good luck.

[Katrin Benhold]

Thank you, Megan.

[Megan Tobin]

Thank you, Katrina.

[Katrin Benhold]

We'll be right back.

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[Katrin Benhold]

Here's what else you need to know today. On Wednesday, President Trump met the new leader of Syria, Ahmed al Sharra, a man who once ran a branch of Al Qaeda. Last year he led the rebel alliance that ousted Syria's long standing dictator, Bashar al Assad. It was the first time in 25 years that leaders from the two countries had met and came one day after Trump announced a plan to lift all sanctions on Syria. When asked what he made of his Syrian counterpart, Trump called him attractive and tough. Trump also said Al Sharra had a good shot at turning his country around. The encounter marked a stunning reversal for the Syrian Leader. Until just five months ago, the US had offered up to $10 million for information leading to his arrest. Today's episode was produced by Ricky Novetsky, Shannon Lynn and Anna Foley, with help from Claire Tennisketter. It was edited by Maria Burns and Paige Cowett, research help by Susan Lee. Contains original music by Marion Lozano, Diane Wong, Rowan niemisto and Pat McCusker, and was engineered by Chris Wood, our theme music is by Jim Brunberg and Ben Landswerk of Wonderly. Special thanks to C.E.

[Megan Tobin]

Zhao.

[Katrin Benhold]

That's it for the Daily I'm Katrin Benhold. See you tomorrow.

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