A garment workshop in Guangzhou with workers working hard to beat the deadline. — Gilles Sabrie/©2025 The New York Times Company
ROWS of white concrete buildings near the Pearl River in southern China house one of the world’s fastest-growing industries: gritty workshops churning out inexpensive clothing that is exported straight to homes and small businesses around the world.
No tariffs are paid, and no customs inspections are conducted.
The labourers who make these goods earn as little as US$5 an hour, including overtime, for workdays that can last 10 hours or more. They pay US$130 a month to sleep on bunk beds in tiny rooms above factories packed with sewing machines and mounds of cloth.
“It’s hard work,” said Wu Hua, who sews pants, seven days a week, at a factory in Guangzhou, a vast metropolis that straddles the Pearl River.
A wholesale clothing market in Dongguan, China. Along the Pearl River in southern China, a fast-growing industry is churning out cheap clothes and toys that are flooding the world duty-free. — Gilles Sabrie/2025 The New York Times Company
E-commerce giants have forged close links from international markets to workers like Wu, shaking retailing and economies around the globe.
The number of duty-free shipments to the United States has risen more than tenfold since 2016, to four million parcels per day last year.
Similar shipments to the European Union have climbed even faster, reaching 12 million parcels a day last year.
Two women renting out rooms to workers in Guangzhou. — Gilles Sabrie/2025 The New York Times Company
Duty-free shipments to developing countries like Thailand and South Africa have also surged.
Now a global backlash is under way.
President Donald Trump ordered a halt on Feb 4 to the duty-free entry, without inspection, of parcels with goods worth up to US$800. He temporarily suspended his order to give officials time to devise a plan for dealing with the mounds of parcels that immediately started piling up at airports for inspection.
Congping standing behind a worker at his sewing shop in Guangzhou. He says his shop depends on its export business. — Gilles Sabrie/2025 The New York Times Company
Since taking office in January, Trump has launched a fusillade of trade actions, including an order for his advisers to come up with new tariff levels that take into account a range of trade barriers.
But a lasting halt on duty-free shipments could be the most far-reaching move.
These shipments have skirted until now not only his new tariffs, including a 10% tax on all goods from China, but also many other tariffs that have accumulated over the years.
A garment workshop in Guangzhou with workers working hard to beat the deadline. — Gilles Sabrie/2025 The New York Times Company
The US action on so-called de minimis shipments – low-value parcels that customs services don’t bother inspecting or calculating tariffs on – was one of many.
Last summer, South Africa imposed 45% tariffs on even the smallest imports of clothing. Thailand ended its exemption of low-value imported parcels from sales taxes, although it continues to allow tariff-free entry of parcels up to 1,500 Thai baht. And the European Commission, the executive arm of the European Union, has proposed to end the 27-nation bloc’s duty-free treatment of packages worth up to 150 euros.
Countries have cited different reasons for their restrictions.
Trump contended that by skirting customs inspections, the duty-free parcels had become a conduit for fentanyl and related materials to enter the United States.
The European Commission cited a need to ensure product safety in imports, stop counterfeit goods and prevent unfair competition.
South Africa and Thailand acted to protect local shop owners.
“We have a duty to ensure that goods entering our market are safe and that all traders respect consumers’ rights,” said Michael McGrath, a European commissioner.
The corner of southern China near Hong Kong has been a hub of low-cost manufacturing for export since the 1980s, especially apparel.
But the rise of e-commerce sellers around the world has created ever-growing demand for such shipments.
Guangzhou has emerged as the global hub of de minimis shipments. Across many square kilometres of the city, fast fashion garments are made in concrete buildings with sewing shops, and sometimes living quarters above them.
Shein and Temu, competing Chinese e-commerce giants that together hold at least a third of the de minimis industry, coordinate much of their supply chains from large offices in Guangzhou.
Amazon has introduced its own de minimis business, Haul, for shipments from China.
China’s de minimis industry is not confined to Guangzhou. Nor is it limited to the industry’s mainstay, clothing.
Yiwu, a city 600 miles northeast of Guangzhou with a vast wholesale market, has become another hub. It coordinates de minimis exports of toys, hats and other small items from towns scattered across the Yangtze River delta.
People outside a garment workshop where piles of Shein packages wait to be shipped in Guangzhou, China, Feb. 12, 2025. Shein and its rival Chinese e-commerce giant, Temu, coordinate much of their supply chains from the city. (Gilles Sabrié/The New York Times)
Shein, in particular, has presented itself as a new business concept, connecting far-flung customers with factories ready to cut and sew almost anything.
Collaborating with 5,000 workshops and small factories across China, Shein’s approach almost completely eliminates the need for store inventory, or even for stores and retail staff.
“At Shein, we have reimagined the supply chain by empowering thousands of small and medium-sized businesses, giving them full insight into what our customers want and need,” the company says on its website.
But workshop owners in Guangzhou complain that Shein is too demanding.
Li Zhi’s workshop produced garments for a Shein contractor four years ago, but the arrangement lasted only a year.
“Shein demands high quality but offers low prices,” she said while sorting lace fabric on a table.
She now sells instead to wholesalers for China’s domestic market, who offer her higher prices.
But business remains difficult, she said, as a shortage of blue-collar workers has sent the going rate for a day’s labour to almost US$70, from US$48 four years ago.
A worker in a garment workshop in Guangzhou. Owners of garment workshops in Guangzhou complain that Shein demands high quality but offers low prices. — Gilles Sabrie/2025 The New York Times Company
In China today, almost two-thirds of 18-year-olds enroll in a college or university, up from 10% in 2000. That has left few young Chinese willing to do factory work.
“Business is deteriorating every year,” Li said. “There are fewer and fewer workers now – mostly those born in the ’70s and ’80s.”
If Trump permanently ends the de minimis rule, imported apparel that is now duty-free would be subject to basic tariffs of 3% to 30%, plus a 7.5% tariff imposed during his first term, plus a 10% tariff on all imports from China that the president imposed Feb 4.
On top of that, there would be customs processing fees of US$5 to US$20 per parcel.
Shein said its suppliers paid their workers twice as much as local minimum wages. Temu said nearly 60% of its sales in the United States were now from American warehouses with shipments that go through customs, with tariffs paid.
Yun Congping, a Guangzhou sewing shop owner who supplies the Thai market, said he and other merchants needed exports.
“If we don’t accept the deals” to supply low-priced exports, he said, “there’s nothing else to do.” — ©2025 The New York Times Company
