Temu, the e-commerce platform known for doling out bargain-busting deals, officially stopped fulfilling American consumers’ orders from its warehouses in China. Instead, the company said it will rely on warehouses and sellers based in the U.S. following the Trump administration’s decision to scrap the de minimis tax loophole.
The tax exemption, which expired at 12:01 a.m. EST Friday, May 2, previously enabled countries like China to import packages priced under $800 duty-free.
Temu ‘actively recruiting’ US businesses
Whereas U.S. customers used to have access to a dizzying array of goods at dirt-cheap prices on Temu, Stateside shoppers are now relegated to inventory housed domestically. Temu called the new logistical setup “compliant and efficient,” adding that it’s centered around a growing network of U.S. sellers.
“Temu has been actively recruiting U.S. sellers to join the platform,” a company spokesperson told CNBC. “The move is designed to help local merchants reach more customers and grow their businesses.”
On Monday, April 28, Temu –– as well as China’s similarly positioned fast-fashion retailer, Shein –– reported that prices would be rising for U.S. customers as the companies contend with tariffs as high as 145% levied against China, as well as the de minimis exemption’s end. Shein, in particular, saw price tags on some of its items jump by more than 300%.
Tariffs
The U.S. imported 1.36 billion packages under the de minimis exemption in 2024, compared to 140 million a decade prior, according to White House numbers.
Now, however, Temu said its pricing for U.S. shoppers “remains unchanged” as orders coming from within the country will not be subjected to import charges. At between 130% and 150%, some of those charges risked doubling the price of any given item.
According to CNBC, Temu’s parent company, PDD Holdings, has been gradually strengthening its U.S. inventory since last year “in anticipation of escalating trade tensions and the removal of de minimis.”
De minimis loophole closed
While President Donald Trump initially suspended tariffs on packages under $800 early in his presidency, he later reversed course and signed an executive order targeting the de minimis loophole. He also raised tariffs on de minimis packages from 30% to 90% after China issued retaliatory tariffs against the U.S.
The Trump administration argued that the de minimis exemption not only allowed Chinese competitors to flood the U.S. market with cheap goods, but it also enabled the precursor chemicals that go into fentanyl to reach the U.S. undetected, as customs agents are less likely to inspect packages that fall below the $800 import tax threshold.
However, the Cato Institute, a public policy research organization, warned eliminating the de minimis exemption could negatively affect Americans and particularly low-income consumers. The organization also stated that the policy change could require the restructuring of supply chains, reduced competition and limited consumer choices.
U.S. officials said that in 2024, nearly 4 million shipments each day relied on the de minimis exemption, accounting for 90% of packages.
