Shein and Temu prices are set to get a lot higher as Biden takes aim at retailers linked to China

The bottom of the barrel prices that have made Chinese-linked e-tailers Shein and Temu so popular with American consumers could soon rise if the Biden administration curtails their use of a trade law loophole.

The companies, known for their $5 T-shirts and $10 sweaters, could see prices rise by at least 20% if the so-called de minimis provision is changed, a spokesperson for the Republican majority of the House Select Committee on the Chinese Communist Party told CNBC. The committee made the estimate after launching investigations into Shein and Temu more than a year ago.

Neil Saunders, a retail analyst and the managing director of GlobalData, agreed the policy change would likely increase prices, but couldn't say by how much. 

"If the de minimis exemption is removed, then the cost of products from marketplaces like Shein and Temu will rise. They will still be cheap marketplaces but they won't have quite the competitive edge on price that they do now," Saunders told CNBC in an email. "That may lose them some market share or slow their growth, but they will likely respond by pushing into some higher-priced items to balance out their propositions."

On Friday morning, the Biden administration announced plans to bar overseas shipments of products that are subject to U.S.-China tariffs from being eligible for the de minimis exemption. 

An obscure tariff law loophole that's been around since the 1930s, the exemption allows packages with a value of less than $800 to enter the United States without the shippers paying import duties and with less scrutiny than larger containers. 

The announcement comes after more than a year of scrutiny into the companies from lawmakers on both sides of the aisle and in particular, the House Select