Ultra-cheap e-commerce giant Temu pivots to U.S. warehouses after Trump’s new trade rules shake up the market.
Chinese discount retailer Temu has stopped shipping products directly from China to U.S. shoppers, marking a major shift in its business model as it confronts new U.S. tariffs and the end of the de minimis provision, CNBC reports.
Products that once dominated Temu’s platform are now labeled “out of stock”, and the site now features only U.S.-based inventory.
What changed:
The de minimis rule, which allowed items under $800 to enter the U.S. duty-free, expired at 12:01 a.m. EDT Friday under an executive order signed by President Donald Trump in April. Trump also imposed 145% tariffs on Chinese goods, forcing companies like Temu to scramble.
The company raised prices and briefly added import charges of 130%–150% on China-shipped products before switching fully to U.S.-based sales. A Temu spokesperson told CNBC that pricing “remains unchanged” for U.S. shoppers and the platform is actively recruiting local sellers to expand domestic inventory.
Market ripple effects:
Temu’s rival Shein has also raised prices, adding checkout banners that inform buyers tariffs are included. Amazon’s Haul program, which depended on the de minimis loophole for cheap China-to-U.S. shipments, reportedly dropped plans to show tariff costs after White House pressure. (More about: Shein and Temu Hike Prices as Trump’s 120% Tariff Takes Effect Next Week)
Bigger picture:
Critics argue the de minimis loophole undercut U.S. businesses and enabled illicit shipments, including fentanyl, by reducing customs oversight. Before Trump, the Biden administration had also considered closing the loophole, signaling bipartisan concern.
Temu is owned by China’s PDD Holdings and became famous in the U.S. for ultra-low-priced goods like $5 sneakers and $1.50 kitchen gadgets. Over the past year, it quietly expanded U.S. warehouses, anticipating a tougher trade environment.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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