Online retailers Shein and Temu are expected to take advantage of lowered tariffs to restock their United States (US) warehouses, according to a report from Reuters.

Citing Monday’s agreement between the US and China to drastically reduce tariffs for 90 days, Yao Jin, associate professor of supply chain management at Miami University of Ohio told Reuters, “This is great for Shein and Temu, if nothing else, to replenish their US inventory.”

The US on Monday agreed to slash the tax on Chinese imported goods from 145 per cent to 30 per cent and China agreed to cut its US tariffs similarly.

The report noted that the agreement between the two countries did not reinstate the US “de minimis” duty exemption for e-commerce packages from China.

That exception, which ended on May 2, used to allow packages worth less than US$800 ordered online from China and Hong Kong to enter the US duty-free.

This had allowed Shein and Temu to curate a business model shipping ultra-cheap items to consumers in the United States, the report indicated, adding that their success drove Amazon to set up a copycat service, Amazon Haul.

The removal of the exemption meant most packages coming from China had to pay 145 per cent tariffs, which the report says led Shein and Temu to cut advertising spending in the US and turn to Europe instead.

Jin said that now, instead of making individual shipments by plane, Shein and Temu are likely to ship products in bulk via container ship to the US over the next 90 days to stock up ahead of the next possible tariff increase.