A package from Temu is seen in front of a screen with the Temu logo. (Photo by Nikos Pekiaridis/NurPhoto via Getty Images)
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Chinese online retailer Temu has been surfacing more products on its app that could be shipped from warehouses within the U.S. following President Donald Trump’s decision to revoke a well-liked tax loophole.
The nearly century-old exception, often called de minimis, has been utilized by many e-commerce corporations to send goods price lower than $800 into the U.S. duty-free. Trump on Saturday suspended the exemption as part of latest tariffs that include an extra 10% tax on Chinese goods.
De minimis has helped propel Temu and Shein’s explosive growth within the U.S. by allowing the businesses to bypass taxes on low-value shipments, and sustain their rock-bottom prices on every little thing from shoes and garments to furniture and electronics.
With the tariff exemption gone, Temu has significantly ramped up its promotion of sellers who’ve inventory in U.S. warehouses, moderately than items which might be shipped direct from China. A scan of listings in Temu’s “Lightning deals” section shows that it’s almost entirely dominated by products with a green “local” badge.
By promoting local inventory, Temu’s products not only arrive faster to shoppers’ doorsteps, but the corporate also reduces its reliance on sellers who ship direct from China. Regardless that the products are stored in U.S. warehouses, many local listings state that the items are sold by businesses based in China.
Representatives from Temu didn’t reply to requests for comment.
Temu is surfacing more products shipped from local warehouses in its app within the wake of a well-liked trade loophole’s suspension.
Temu’s promotion of U.S.-based products also puts it in additional direct competition with Amazon, eBay and Walmart, which have also signed up sellers in China who ship goods overseas to their warehouses. Amazon last yr took notice of Temu and Shein’s dramatic growth within the U.S. when it launched its own budget storefront, called Haul.
Temu, which is owned by Chinese online retailer PDD Holdings, began onboarding sellers with inventory in U.S. warehouses in March. By July, roughly 20% of Temu’s U.S. sales got here from those sellers, not merchants based in China, in line with e-commerce market research firm Marketplace Pulse.
Temu, Shein and other Chinese e-commerce corporations are attempting to attenuate the extent of disruption to their services as they face recent, more stringent customs requirements. They were thrown into further chaos on Tuesday night when the U.S. Postal Service abruptly announced it was suspending inbound packages from China and Hong Kong “until further notice.”
Lower than 12 hours later, the USPS reversed its decision, and resumed accepting packages from those regions. The agency also said it will work with U.S. Customs and Border Protection to “implement an efficient collection mechanism for the brand new China tariffs to make sure the least disruption to package delivery.”
The uncertainty has created volatility for PDD’s stock price which fell 6% on Monday, rose 8% on Tuesday and fell greater than 3% on Wednesday.
Critics of the de minimis provision say it’s provided an unfair advantage to Chinese e-commerce corporations, and created an influx of packages which might be “subject to minimal documentation and inspection,” raising concerns around counterfeit and unsafe goods.
Others have advocated for the de minimis exemption to stay in place, saying its removal would burden customs officials and result in higher government costs.
“In some unspecified time in the future there’s going to be 3 million of those goods piling up a day and customs can do their best, but they don’t seem to be equipped,” said Hugo Pakula, CEO of supply chain compliance company Tru Identity. “They need to do 10x more screenings this week than last week.”
CBP has said it processed greater than 1.3 billion de minimis shipments in 2024. A 2023 report from the House Select Committee on the Chinese Communist Party found that Temu and Shein are “likely responsible” for greater than 30% of de minimis shipments into the U.S.
Shein has also been courting U.S. buyers and sellers. The corporate opened distribution centers in states including Illinois and California in 2022, and a supply chain hub in Seattle last yr. The corporate said the Seattle hub would enable it to “localize and support speedier delivery times for American consumers.”
WATCH: Amazon Haul takes on Temu
