A package deal from Temu is seen in entrance of a display with the Temu emblem. (Photograph by Nikos Pekiaridis/NurPhoto through Getty Pictures)
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Chinese language on-line retailer Temu has been surfacing extra merchandise on its app that may be shipped from warehouses within the U.S. following President Donald Trump’s determination to revoke a well-liked tax loophole.
The practically century-old exception, often called de minimis, has been utilized by many e-commerce corporations to ship items value lower than $800 into the U.S. duty-free. Trump on Saturday suspended the exemption as a part of new tariffs that embrace an extra 10% tax on Chinese language items.
De minimis has helped propel Temu and Shein’s explosive progress within the U.S. by permitting the businesses to bypass taxes on low-value shipments, and maintain their rock-bottom costs on all the pieces from sneakers and garments to furnishings and electronics.
With the tariff exemption gone, Temu has considerably ramped up its promotion of sellers who’ve stock in U.S. warehouses, fairly than gadgets which might be shipped direct from China. A scan of listings in Temu’s “Lightning offers” part reveals that it is nearly totally dominated by merchandise with a inexperienced “native” badge.
By selling native stock, Temu’s merchandise not solely arrive quicker to buyers’ doorsteps, however the firm additionally reduces its reliance on sellers who ship direct from China. Despite the fact that the merchandise are saved in U.S. warehouses, many native listings state that the gadgets are offered by companies based mostly in China.
Representatives from Temu did not reply to requests for remark.
Temu is surfacing extra merchandise shipped from native warehouses in its app within the wake of a well-liked commerce loophole’s suspension.
Temu’s promotion of U.S.-based merchandise additionally places it in additional direct competitors with Amazon, eBay and Walmart, which have additionally signed up sellers in China who ship items abroad to their warehouses. Amazon final 12 months took discover of Temu and Shein’s dramatic progress within the U.S. when it launched its personal price range storefront, referred to as Haul.
Temu, which is owned by Chinese language on-line retailer PDD Holdings, started onboarding sellers with stock in U.S. warehouses in March. By July, roughly 20% of Temu’s U.S. gross sales got here from these sellers, not retailers based mostly in China, in response to e-commerce market analysis agency Market Pulse.
Temu, Shein and different Chinese language e-commerce corporations try to reduce the extent of disruption to their companies as they face new, extra stringent customs necessities. They have been thrown into additional chaos on Tuesday evening when the U.S. Postal Service abruptly introduced it was suspending inbound packages from China and Hong Kong “till additional discover.”
Lower than 12 hours later, the USPS reversed its determination, and resumed accepting packages from these areas. The company additionally stated it might work with U.S. Customs and Border Safety to “implement an environment friendly assortment mechanism for the brand new China tariffs to make sure the least disruption to package deal supply.”
The uncertainty has created volatility for PDD’s inventory worth which fell 6% on Monday, rose 8% on Tuesday and fell greater than 3% on Wednesday.
Critics of the de minimis provision say it is offered an unfair benefit to Chinese language e-commerce corporations, and created an inflow of packages which might be “topic to minimal documentation and inspection,” elevating issues round counterfeit and unsafe items.
Others have advocated for the de minimis exemption to stay in place, saying its elimination would burden customs officers and result in increased authorities prices.
“In some unspecified time in the future there’s going to be 3 million of those items piling up a day and customs can do their greatest, however they are not geared up,” stated Hugo Pakula, CEO of provide chain compliance firm Tru Id. “They must do 10x extra screenings this week than final week.”
CBP has stated it processed greater than 1.3 billion de minimis shipments in 2024. A 2023 report from the Home Choose Committee on the Chinese language Communist Get together discovered that Temu and Shein are “probably accountable” for greater than 30% of de minimis shipments into the U.S.
Shein has additionally been courting U.S. patrons and sellers. The corporate opened distribution facilities in states together with Illinois and California in 2022, and a provide chain hub in Seattle final 12 months. The corporate stated the Seattle hub would allow it to “localize and help speedier supply occasions for American shoppers.”
WATCH: Amazon Haul takes on Temu
