Temu announced on Friday that President Trump has implemented a halt on shipping affordable goods from China to the US, aiming to close trade loopholes that previously allowed the company to bypass tariffs and customs checks.
As a result, their US website has pivoted towards exclusively featuring “local” products. This means items shipped from overseas are now stored in US warehouses to comply with Trump’s tariffs.
“At this time, all transactions in the US are handled by local sellers, with domestic orders being fulfilled accordingly,” a spokesperson for Temu stated.
The removal of the De Minimis exemption has significantly impacted Temu, which is owned by PDD Holdings, a Chinese company. In contrast, their competitor Shein continues to send items to the US tax-free for purchases under $800, benefiting from similar loopholes.
This De Minimis rule has made it possible for the two Chinese e-commerce giants to thrive, thanks to cheap and quick shipping options for low-cost apparel.
According to US Customs and Border Protection, under the 2024 exemption, a staggering 1.36 billion shipments made their way into the US.
However, as of midnight Friday, Trump has put an end to exemptions on products from China and Hong Kong.
Temu has been preparing for this tariff tightening and recently announced plans to highlight “local” products on their site and increase prices.
They have also begun to impose certain “import fees” on overseas products.
With the new tariffs and a hefty 145% rate in China, both Temu and Shein’s shipments must now go through customs without exemption, potentially leading to shipping delays.
The Wall Street Journal reported that customs officials are required to randomly inspect 1 million packages daily, which is the volume of items both companies are currently sending to the US.
It appears that about a year ago, plans to close the loophole were underway, prompting Temu to start enlisting US sellers to import their inventory directly from China.
According to a spokesperson, Temu continues to recruit US sellers.
Previously, Temu’s products were 20% to 30% cheaper than those available from US competitors like Amazon. However, as their US stock dwindles, they might lose a significant portion of that price edge.
