New data shows that in major U.S. markets, low-cost e-commerce giants Temu and Shein have significantly slowed their use of President Donald Trump’s focus on tariffs on Chinese imports and closing the De Minimis loophole.
Temu's U.S. Daily Active User (DAUS) cut 52% in May to March, while rival Shein's tariffs fell 25% according to data shared by market intelligence firm Tower with CNBC.
Daus is a measure of the number of people accessed or interacted with the platform every 24 hours. Monthly Active Users (MAUS) is a measure of user engagement over 30 days, with Temu (30%) and Shein (12%) also dropping in May against March.
The decline is also reflected in the Apple App Store rankings for both platforms. Data shows that Temu ranked 132 in the average ranking in May 2025, while the average ranking was a year ago, while Shein’s average ranking average ranking last month was 60, while the top ten ranked in the top 10.
Neither Temu nor Shein immediately responded to CNBC's request for comment.
Temu and Shein have both shrunk our advertising spending in recent months since the Trump administration issued the tariff announcement, so users have dropped.
Trump announced tariffs on Chinese imports in April, including the end of a "minimum" tariff exemption on May 2, which allowed the company to ship low-cost goods worth less than $800 to the U.S. tax exemption.
In May, Temu's spending on U.S. advertising fell 95% year-on-year, while Shein fell 70%.
“Temu and Shein’s decline in U.S. advertising spending was also evident in April, with spending down 40% and 65% respectively,” Seema Shah, vice president of research and insights at Sensor Tower, said in an email to CNBC.
Temu and Shein also changed the logistics model after the tariffs, shifting from the drop shipping model, which allowed them to send items directly from Chinese suppliers to American consumers, especially in the case of Temu, to build a network of American warehouses.
Such moves may also affect the company's advertising spending strategies and customer acquisition models, said Rui MA, founder and analyst at Tech Buzz China.
"All these additional costs and regulatory hurdles are clearly damaging the prospects for the U.S. growth for the Chinese platform," she wrote in an email comment.
Research from Tech Buzz China Research, which began in March, shows that Temu will lose most of its price advantage and find that the tariffs that are difficult to operate will be 50% tariffs. Currently, tariffs on former de Minimis imports are currently 54%, down 120% in a 90-day tariff truce between the United States and China.
Last week, Temu's parent company PDD Holdings reported lower-quarter earnings than estimates, noting that tariffs are a huge pressure on sellers.
HSBC said Temu's popularity is still emerging outside the U.S., with non-U.S. users accounting for 90% of the platform's 405 million MAUS in the second quarter.
HSBC analysts wrote in a note last week that it was “backed by growth in Europe, Latin America and South America.” They added that the fastest growth occurred in “less wealthy markets.”
"Many (Chinese platforms) are now actively redirecting their efforts to other markets such as Europe," Jack Ma said.