Temu has stopped shipping low-cost items from China to U.S. consumers as Chinese e-commerce companies overhauled their business model in response to Trump administration tariffs.
It said Friday that Temu Marketplace sales will now be realized among U.S. sellers, not Chinese sellers—from phone chargers to sales items from silicon toilets.
The company has been building a seller network in the U.S. for more than a year, adding that it is actively recruiting more businessmen in the country. However, the decision to abandon the Chinese seller means that its U.S. business may be greatly reduced.
These changes have been made with the US "de Minimis" customs rules, which waives import taxes worth less than $800 from the entry parcels.
Starting Friday, low-value goods based on China and Hong Kong will receive a 120% tariff or a $100 fee, depending on how the goods are delivered. The $100 fee will double from June 1.
The sudden change posed a major challenge to Temu and its rival Shein, who mostly sold cheap clothes. Both retailers violated the “De Minimis” exemption to weaken cheap Chinese-made goods from U.S. retailers to ship directly to consumers.
The Financial Times reported this week that Shein is exploring whether to transfer its production for its U.S. operations to China, and its long-awaited London stock market fluctuations are likely to be further delayed by changes in tariffs. The fast fashion retailer's U.S. business accounts for one-third of its $38 billion revenue.
Analysts estimate that the United States is the largest market for Temu owned by Chinese company PDD Holdings.
“Temu’s pricing remains unchanged as the platform transitions to a local fulfillment model,” the company said. “The move is designed to help local merchants attract more customers and grow their business. This shift is part of Temu’s continuous adjustment to improve service levels.”
Temu and Shein are two outstanding victims of the U.S.-China trade war. Washington imposes tariffs of up to 145% on most Chinese goods, and China's retaliation against tariffs is 125%.
Both Temu and Shein have driven their rapid growth with blanket social media ads, and their response is to cut advertising spending in recent weeks.
Beijing is "evaluating" the U.S. proposal to start trade talks recently, Chinese officials said Friday. Beijing had previously suggested if Washington hopes it can get involved.