NASHVILLE, Tenn. (AP) – E-commerce sites Temu and Shein, both founded in China, have announced plans to raise prices for U.S. customers starting April 25. This decision comes as a direct consequence of former President Donald Trump's initiatives aimed at addressing the trade imbalance between the United States and China by imposing a substantial 145% tariff on goods shipped from China.
Temu, owned by PDD Holdings, and Shein, now based in Singapore, each issued nearly identical notices stating that increasing operating expenses were causing these price adjustments. Neither company provided specific details regarding the extent of the upcoming price increases. The timing and nature of their statements suggest a strategic alignment in their responses to the evolving trade policies affecting their businesses.
Since their inception in the U.S. market, both Shein and Temu have disrupted traditional Western retail by offering an extensive range of products at remarkably low prices, supported by aggressive digital marketing and influencer advertising campaigns. The hefty tariffs imposed by Trump, which also included the termination of a customs exemption that previously allowed goods valued under $800 to enter the U.S. without duty, has posed challenges to the business models of these platforms.
The executive order signed by Trump this month will terminate the widely utilized de minimis exemption for goods imported from China and Hong Kong, effective May 2. This shift will subject these goods to the hefty 145% tariff, significantly altering the competitive landscape for e-commerce companies. As a result, nearly 4 million low-value parcels, primarily from China, currently entering the U.S. under this exemption will be impacted, leading to higher costs for consumers.
The removal of this exemption has been supported by various U.S. politicians, law enforcement agencies, and business groups who viewed it as a loophole favoring inexpensive Chinese products and facilitating the entry of illicit drugs and counterfeit goods into the American market.
Shein primarily targets young women with a diverse range of affordable clothing, cosmetics, and accessories, often collaborating with social media influencers for promotional campaigns. In contrast, Temu is noted for offering a broader spectrum of products, including household items, humorous gifts, and small electronics, extensively advertised through online platforms.
In a competitive response, American e-commerce giant Amazon launched a low-cost online storefront in November, featuring electronics, apparel, and other products priced at under $20. Many of these offerings closely resemble the types of products typically marketed by Shein and Temu, indicating a strategic move by Amazon to capture market share in this budget segment.
In light of the impending price hikes, both companies have urged their customers to continue shopping and take advantage of available products before the adjustments take effect. Temu's notice reassured customers, stating, "We’ve stocked up and stand ready to make sure your orders arrive smoothly during this time. We’re doing everything we can to keep prices low and minimize the impact on you."
The economic implications of these changes reflect the broader tensions in U.S.-China trade relations and the shifting dynamics within the global e-commerce landscape. With price increases on the horizon, consumers may need to reassess their shopping habits as the market adjusts to the new financial realities introduced by these tariffs.
