Shein has slumped to a loss as it revealed a sales hit from US president Donald Trump’s move to scrap an import duty exemption on small packages in an update ahead of its planned stock market debut in Hong Kong.

The fast fashion group reported bottom line net losses of 99 million US dollars (£74 million) for the three months to the end of March against profits of 395 million US dollars (£296 million) a year earlier.

Sales edged 1.1% higher to 9.05 billion US dollars (£6.78 billion).

The group – which recently announced its decision to list its long-planned initial public offering in Hong Kong – said its first quarter loss was largely down to a 328 million dollar (£246 million) hit from an accounting change for special investor shares.

But the figures, which were made in its first filing since plans for the group’s Hong Kong listing emerged, laid bare the impact of Mr Trump’s trade war on the group.

In May last year, the US removed a so-called “de minimis” tariff exemption on small packages, which Shein had previously used to ship garments from China directly to customers.

Earlier this month, the EU also made the same move by imposing a three euro (£2.56) duty on small parcels imported from outside the trading bloc.

Shein said: “Since May 2025, the removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues.”

It said it had “since observed signs of normalisation in consumer purchasing behaviour and sales trends in the US”.

The group added that the EU’s removal of the small parcel exemption may also have a “material adverse effect on our business, financial condition and results of operations”.

Given that Shein made around a third of sales from Europe last year, it said the impact on the group could be larger than that from the US hit.

“Although it remains too early to fully assess, it is possible that trends in the EU could be generally in line with or exceed the impact observed in the US after the removal of the US de minimis exemption,” Shein cautioned.

The group said it was looking at raising prices across the US and Europe to offset the sales impact.

“In response to the increased duties and taxes, we are pursuing a wide range of options, including increasing our prices in the US market to offset a portion of the increased costs,” it said.

It said there may be a “short-term adverse impact” to sales in Europe as it also moves to hikes prices across the EU, but said the “long-term impact remains too early to fully assess”.

The UK is also looking to close the small parcels loophole, but not for some years.

Former Chancellor Rachel Reeves confirmed plans in the 2025 autumn budget to follow in the footsteps of the US and Europe and review the customs loophole, saying she wants to “support a level playing field in retail”.

But the proposed reforms are not expected to be in place until 2029, which has prompted calls from high street retailers to bring this forward.