Shein says it swung to a quarterly loss as its sales slowed after US President Donald Trump removed an import duty exemption on small packages.

It also comes as uncertainty remains over the tit-for-tat US-China tariffs wars, which is currently paused.

The fast-fashion giant, which has its headquarters in Singapore but was founded in China, said it lost $99m (£74.1m) in the first three months of the year, compared with a net income of $395m a year earlier.

The announcement is part of the firm’s preparations ahead of its stock market debut in Hong Kong, although the filing did not give any details on the size, timetable or pricing of the planned initial public offering (IPO).

“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,” Shein said in the filing.

The company also said the Iran war had hit demand, increased costs and caused delays of deliveries in some markets.

The first-quarter figures also partly reflected a paper loss of $328m due to an accounting change for special investor shares. The shares can be turned into ordinary stock later, and their value can change before a listing.

The filing showed that in the year to the end of March 2026 Shein had 281 million active customers – a rise of more than 16% on a year earlier – who placed a total of more than one billion orders.

On 10 July, the China Securities Regulatory Commission (CSRC) gave Shein approval for a Hong Kong share sale after failed attempts to list in New York and London.

The Hong Kong share listing is expected to take place in the coming months.

The figures show the impact of a Trump-signed executive order to end a global tariff exemption that had been used by US shoppers of low-cost goods.

That order, which came into effect on 29 August 2025, broadened an earlier presidential action which specifically targeted cheap products from China and Hong Kong to cover the rest of the world.

The so-called de minimis exemption had allowed goods valued at $800 or less to enter the US without paying any tariffs. US consumers relied on the exemption to buy cheap goods from online commerce sites like Shein and Temu.

The White House said the global exemption was being used to “evade tariffs and funnel deadly synthetic opioids” to the US.

“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,” Shein said in the filing.

Earlier in July, the European Union imposed a €3 (£2.56; $3.42) levy on low-value e-commerce imports.

The measure is aimed to curb what the trading bloc has said is unfair competition from China.

Oil dropped, stocks and bonds rose as the US and Iran refrained from retaliatory strikes, easing concerns over potential disruptions to Middle East energy supplies after a recent escalation in the conflict.

Brent crude fell as much as 7.4% to below $90 a barrel, before paring losses as the US paused an almost two-week run of strikes against Iran. MSCI’s Asia Pacific equities gauge rose 0.4% and contracts for the Nasdaq 100 Index climbed 1.2% as sentiment improved after last week’s selloff in chip stocks.

The dollar, the haven of choice during the Middle East conflict, weakened against almost all of its Group-of-10 peers as tensions eased. Treasuries gained along with government bonds in Australia and New Zealand as inflation concerns receded. Gold led precious metals higher.

Read more: August Rush: Over 2 dozen companies plan Street debut next month

“A resolution to the conflict would be a positive development,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab. The pause in attacks raises “hopes that the two sides will enter negotiations.”

The lull in hostilities sets the tone for a pivotal week in markets, with traders focused on whether the Federal Reserve will raise interest rates on Wednesday after the recent surge in oil prices fueled inflation concerns. Investors are also awaiting earnings from megacap technology companies after a recent backlash against heavy spending on artificial intelligence.
After striking Iran for 13 days, the US has apparently held off since late Friday without explanation, raising questions about President Donald Trump’s next move. Iran’s army said Sunday that Tehran had also suspended its military response. The pause came as Iranian and Omani officials held talks over shipping through the Strait of Hormuz, raising hopes that the key oil transit route may avoid further disruption.

Tensions in the Middle East had sent oil prices soaring in July, overshadowing a tamer-than-expected reading on June consumer prices that seemed to offer officials breathing room to keep rates stable. Add to that a demand boom fueled by AI and the Trump administration’s announcements of new tariffs, and Fed watchers see the possibility of dissents at the July 28-29 meeting if officials again leave policy unchanged.

“We think the Fed will probably not hike,” Krishna Guha, head of central bank strategy at Evercore ISI, wrote in a note. “But we cannot take the probability too low given Warsh’s refusal to set out his strategy,” he said, referring to the new Fed chair Kevin Warsh.

Three days of Group-of-Seven central bank decisions begin with the Fed on Wednesday, followed by the Bank of England and the Bank of Japan. While no changes are expected in interest rate policy, officials are likely to emphasize vigilance over the inflationary impact of higher energy prices.

Elsewhere, the Singapore dollar strengthened against the US currency after officials further tightened monetary policy. The Monetary Authority of Singapore, which uses the exchange rate as its main policy tool rather than interest rates, raised the rate of appreciation of its policy band “very slightly,” it said. It left the width and center unchanged.

In other corners of the market, the yield on the Treasury 10-year fell five basis points to 4.63%. Non-interest-bearing gold climbed over 1% to $4,100 an ounce. The yen strengthened to about 163.60 per dollar.

Another key focus for markets will be earnings from megacap technology companies after a recent round of selloff in AI stocks rekindled doubts over whether billions of dollars being poured into infrastructure will generate commensurate returns. The selloff showed how much the narrative around AI and the Magnificent Seven tech behemoths has shifted.

This change makes for a tough setup heading into this week, with earnings from Microsoft Corp. and Meta Platforms due on Wednesday, followed by Apple Inc. and Amazon.com Inc. on Thursday.

“That is shaping up as the major clearing event for the month,” said Billy Leung, an investment strategist at Global X Management. “The market has been punishing AI capex guidance all July even when the underlying numbers beat, so the read-through from these three on spending trajectory and monetisation will do more to set direction than anything in today’s session.”

Abstract

Southeast Asia faces growing US-China rivalry reminiscent of pre-WWI tensions. ASEAN’s traditional diplomatic balancing act is under strain as both superpowers pressure the region. Malaysia and Southeast Asia must build collective strategic weight beyond polite neutrality to avoid becoming casualties of great-power conflict.

Key Points

• An ancient Southeast Asian instinct of careful navigation resurfaces as US-China rivalry intensifies, mirroring dangerous pre-WWI patterns of declining hegemony, rising challengers, territorial disputes, and nationalist tensions that threaten regional stability.

• ASEAN’s decades-long diplomatic balancing act — absorbing American security, Chinese trade, and multiple powers’ investments — faces unprecedented strain as both superpowers pressure the region to align with their competing visions of world order.

• Southeast Asia, particularly Malaysia, has become a critical geopolitical hinge in the technology and supply chain war, making passive neutrality increasingly untenable as great-power competition penetrates the region’s economic infrastructure.

The Return of Great-Power Rivalry

Southeast Asia faces a world that smells dangerously like 1914. History is repeating its familiar patterns: a declining hegemon, a rising challenger, territorial disputes, naval build-ups, and nationalist fever amplified by new technologies. Author Odd Arne Westad’s The Coming Storm serves as a critical warning that the region must heed. If America and China stumble into conflict, Asean’s 684 million people and US$3.84 trillion in global trade will not be spectators — they will be the table. The challenge is no longer simply avoiding a choice between Washington and Beijing, but building enough collective resilience that neither superpower can treat Southeast Asia merely as terrain.

---

Asean’s Diplomatic Balancing Act Under Strain

For decades, Southeast Asia performed a remarkable feat of strategic improvisation, absorbing American security, Chinese trade, Japanese capital, and European markets while transforming swamps into ports and fishing villages into industrial hubs. This wasn’t cowardice — it was survival. However, Washington now speaks through export controls, tariffs, and technology denial, while Beijing leverages coastguard vessels, artificial islands, and infrastructure loans. Both superpowers publicly respect Asean’s autonomy while privately preferring it exercised in their favour. The region’s famously consensus-driven, carefully worded diplomacy — once its greatest strength — is buckling under the pressure of a fundamentally harsher geopolitical reality.

Malaysia’s Precarious Position at the Crossroads

Malaysia sits almost perfectly inside this great-power contradiction. Facing the strategically vital Strait of Malacca and deeply embedded in both Chinese commerce and American technology supply chains, Malaysia cannot afford complacency. Penang alone, as a critical global semiconductor hub, has become part of the nervous system of 21st-century geopolitical competition. Modern rivalries are no longer fought only on battlefields — they play out through customs forms, export permits, sanctions lists, and undersea cables. As Southeast Asia becomes the world’s favourite supply-chain workaround, it simultaneously becomes the place where both powers test each other’s limits. The elephants are moving. The question is no longer whether the storm can be avoided — but where the lightning strikes first.

Source : Opinion: The table, not the audience — Asean and the coming US-China collision

Other People are Reading

The Rudd-Gillard era of disunity has likely influenced Labor’s approach to prioritise unity over potentially fractious public debate, a political historian says.

Factional leaders blocked public discussion about the party’s position on Israeli actions, including a reference to “genocide” against Palestinians, on the conference floor during a three-day meet in Adelaide that closed on Saturday.

The only debate thrashed out in the open at Labor’s national conference was on expanding voluntary assisted dying to telehealth appointments, with all other changes passed unopposed.

Backroom deals on policy platform motions weren’t unusual, but the conference was very managed compared to past events, prominent Labor historian Frank Bongiorno said.

“This is a government and a party that is still very wounded really by its last time in office between 2007 and 2013, when there was a collapse of unity,” the University of Canberra academic told AAP.

“Going back to that period, you wouldn’t say there was a strong culture of debate at conference, although they did obviously have the debate over marriage equality and also debates about selling uranium to India.

Professor Bongiorno said the party had more frequent robust conference debates in 1970s, 80s and 90s, including on privatisation.

“It was taken for granted that when you had something that was particularly contentious that there was going to be some sort of debate,” he said.

“I think back to someone like (prime minister Paul) Keating making the case on the floor in 1984 for allowing foreign banks into the country.

“There just doesn’t seem to be that kind of culture … it’s clearly wound down and I suspect the media environment is part of the reason for that.”

The policy adopted by Labor delegates noted the party’s opposition to Israeli annexation of Palestinian territories and called for illegal settlement activity to end.

Former cabinet minister Ed Husic, now a backbencher, led the push for the party to publicly have it out over the party’s policy.

But Gaza hadn’t universally split Labor’s left and right factions in the same way other foreign policy issues had in decades past, Prof Bongiorno said.

“Look at who the major, open dissenter is: someone who comes from the NSW right in Ed Husic,” he said.

“That would have been utterly unheard of back in the 1980s and 90s, for someone from that faction to take that kind of position.”

The prime minister, who originates from the party’s left faction, on Sunday defended Labor limiting debate, declaring the meeting the “most transparent political conference in Australia by far”.

“The party has changed and one of the things that’s happened in the party is we are more cohesive, more united than we’ve ever been before,” he said.

Opposition home affairs spokesman Jonathon Duniam said the prime minister ruled his party with an “iron fist” and any dissent at the conference was quickly shut down.

ET Intelligence Group: Initial trends in pharma results for the June quarter show pressure on the US business, with a double-digit fall in net profit and contraction in operating profitability. The domestic business continued to be a bright spot for both companies. Obesity therapies, respiratory products, biosimilars and speciality launches are key growth drivers in the coming quarters.

Dr Reddy’s Labs lost 10% and Cipla 8%, on bourses, underperforming the 10% gain in the BSE Healthcare index over the past 12 months. These stocks are expected to remain range-bound in the short term given the challenging business scenario. Analysts have reduced earnings forecasts for each company by 6-8% for FY27 and FY28.

Read more: August Rush: Over 2 dozen companies plan Street debut next monthDr Reddy’s reported a weaker-than-expected quarter as profitability was hit by a sharp decline in lenalidomide sales and a one-time ₹239.7-crore provision linked to quality issues in its semaglutide portfolio. Its revenue declined 5.6% year-on-year to ₹8,070.5 crore, while net profit dropped 69.2% to ₹434.8 crore.

In comparison, Cipla reported its highest-ever June quarter revenue of ₹7,119.3 crore, up 2% year-on-year, but profit declined 39.2% to ₹785.6 crore as margins came under pressure from product mix changes, launch-related investments, inventory charges and geopolitical disruptions.
Operating margin before depreciation and amortisation (Ebitda margin) for Dr Reddy’s dropped to 12.5% from 26.7% in the year-ago quarter and contracted to 16.7% from 25.6% for Cipla during the period, highlighting the profitability challenges both companies currently face.

The US business remains the key transition area for both companies. Dr Reddy’s North America revenue declined 35% year-on-year as lenalidomide sales continued to normalise; however, the company maintained that its core non-lenalidomide business should deliver double-digit growth in FY27. Cipla’s North America revenue dropped 21% to ₹1,532 crore.
Both the companies, however, remain optimistic about their US prospects. Dr Reddy’s launched six products during the quarter, including first-to-market generic bosutinib, used in cancer treatment, with 180-day exclusivity, while Cipla commercialised Nintedanib (used to treat lung infections), Dapagliflozin (used in diabetes treatment), and generic Ventolin (used to treat respiratory ailments).

Obesity and peptide-based therapies are emerging as future growth drivers. Dr Reddy’s has launched generic semaglutide injection in Canada and semaglutide tablets in India, while also introducing a GLP-1 nutrition product with Nestle. Although quality issues temporarily disrupted semaglutide supplies, the company expects production to resume by November.

Cipla has gained early traction in obesity management through Yurpeak (tirzepatide), licensed from Eli Lilly. The brand generated around ₹80 crore in sales during the quarter and has already become the second-largest brand in the segment after Mounjaro.

Emkay Research has reduced earnings estimates for each of the two companies by 6-8% for FY27-28. The broker has downgraded Dr Reddy’s’ target price by 8% to ₹1,200 while maintaining a ‘reduce’ rating on the stock. On the other hand, it has retained an ‘add’ rating on Cipla, citing strong momentum in domestic sales and has retained the target price for Cipla at ₹1,450.