The Chinese company Temu is making a significant strategic shift in its operations in the United States, following the implementation of a new tariff policy that led to the cancellation of the De Minimis rule – a regulation that allowed imports into the U.S. of products worth up to $800 without paying customs duties. The cancellation of this benefit, which went into effect following an executive order signed by President Donald Trump, was also accompanied by the imposition of tariffs exceeding 100% on imported products from China. The new measures forced many Chinese companies to make substantial changes to their strategies – including Temu, which became known for its ultra-low prices on products shipped directly from China, such as $5 shoes or kitchen gadgets for under two dollars.
To cope with the new and heavy costs, the Chinese retail giant has completely ceased direct shipments from China to the U.S. Instead, the company’s website and app now display only products stored in warehouses within the United States. Products originating from China appear as "out of stock," and all sales are conducted through local sellers. A company spokesperson stated that prices for the American consumer have not changed and that Temu is "transitioning to a local shipping model in order to maintain an accessible shopping experience."
It was also reported that Temu has begun actively recruiting American sellers to its platform, aiming to expand the product range and provide local business owners with an opportunity to reach new audiences. According to reports on CNBC, customers who recently tried to purchase products that were previously shipped from China encountered "import taxes" ranging from 130% to 150% – sometimes more than the product's price itself. Currently, local products are labeled as including "no import taxes" and "no additional costs at delivery."
Temu, which belongs to the Chinese conglomerate PDD Holdings, had been preparing in advance for the escalation in U.S.–China trade tensions, and over the past year gradually expanded its inventories in the U.S. This latest move also comes in the wake of similar steps by other companies, such as fashion giant Shein, which has begun updating product prices and indicating at checkout that customs duties are included in the price. Amazon has also examined new pricing options for low-cost products imported from China, but has so far put the changes on hold.