China-founded e-commerce giants Temu and Shein are set to raise prices for U.S. customers due to President Trump’s tariff policies aimed at addressing trade imbalances. Temu, owned by PDD Holdings, and Shein, now based in Singapore, cited increased operating expenses from global trade rule changes. Both companies announced price adjustments starting April 25, without specifying the extent of the increases. The recent 145% tariff on Chinese goods and the elimination of a customs exemption for goods under $800 have impacted their business models.
E-commerce companies heavily utilized the now-canceled exemption, which allowed duty-free imports, particularly benefiting Chinese goods. The upcoming removal of this provision will subject goods from China and Hong Kong to the 145% import tax. This change will affect around 4 million low-value parcels entering the U.S. daily, mainly from China. The exemption removal was advocated by U.S. officials and business groups to address trade disparities and curb illicit imports.
Shein, known for offering affordable fashion and beauty products, targets young women through influencer partnerships, while Temu sells a variety of products, including household items and electronics. Both companies have reduced their advertising spending, impacting platforms like Facebook and Instagram. Amid these challenges, Amazon has introduced a low-cost online storefront similar to Shein and Temu. Despite the impending price hikes, the companies assure customers of their commitment to minimizing the impact and ensuring smooth order deliveries.
