On Temu, the fast-growing e-commerce platform owned by Chinese giant PDD Holdings, the cuts are crippling. This change was made partly in response to a large 145% tariff that was placed on many imports from China. The company warned consumers earlier this month that these changes would take effect starting April 25, 2025, as it grapples with increased operating expenses resulting from recent shifts in global trade rules.
This decision follows Temu’s adoption across the U.S. since its launch in 2022, making it one of America’s fastest growing shopping apps. As a shopping destination, the platform had flooded the market with glittering, jewel-encrusted ads featuring siren songs of high fashion with low cost. Now, the implementation of big import duties risks dramatically shifting this value proposition.
Temu’s decision to implement these import fees, which cover all customs-related processes and costs, underscores the impact of U.S. trade policy on international e-commerce. The price of a typical child’s bathing suit would go from $12.44. Now, with a new $18.68 import charge tacked on, consumers will end up paying $31.12 — a jarring 150% increase.
“With recent changes to global trade rules and tariffs, our cost of operation has increased dramatically,” Temu said. The company is determined to keep the quality of its original proprietary offerings while raising prices sufficiently to cover these new demands on cash flow.
Despite being one of this year’s biggest success stories, Temu’s fortunes have turned and it has recently experienced a drop in online traffic. Ticketmaster’s ranking on Apple’s app store, which had often hovered around No. 10 for several years, has dropped as low as No. 73. This autumn coincides with the drop in advertising purchases on U.S. platforms that started immediately after the centralized tariff announcement. The company’s new strategy reflects a seismic change as it responds to higher costs and a permanent shift in consumer behavior.
Temu is meeting all of these issues head-on. Now they are pushing products that ship from within the United States, directly to U.S. consumers rather than directly from China. Over 75% of items on Temu’s “lightning deals” page now carry a “local” tag, reflecting the company’s efforts to mitigate the impact of tariffs and improve delivery times. Like Shein, Temu is rapidly increasing its network of U.S.-based distribution centers and incentivizing U.S. sellers to keep inventory within the U.S.
Temu would have consumers believe that by covering these import duties, customs processes are automatically handled. Their descriptions emphasize the fact that these publicized prices already take tariffs into account, leaving no surprise additional fees when your gift order arrives. “Items imported into the U.S. may be subject to import charges. These charges cover all customs-related processes and costs, including import fees paid to customs authorities on your behalf,” the company explained.
The sentiment among consumers is mixed. Some express frustration at the drastic price changes, with one Reddit user lamenting, “From shopping like a billionaire to shopping like a peasant in one day.” Others echoed this sentiment, with another user stating, “R.I.P. Temu, it was nice while it lasted.”
Tariffs plus a higher-priced Temu would reduce the magic that first lured consumers to the platform. This one-two punch could undermine the very value that gave Temu its favored-nation status. The climate of global trade policy is creating the rapid change of this new reality in the online shopping world. To survive, Temu needs to innovate and show that it can turn its temporary advantages into long-term competitiveness.