Temu, the Chinese online retailer, has dramatically shifted its business strategy in response to recent changes in U.S. tariff regulations. When President Donald Trump signed an executive order dumping the de minimis rule as we know it, Temu was the first out of the gate to prepare its pivot. It had, until this new implementation rule, exempted goods worth $800 or less from entering the U.S. without import tariffs.
In response to these changes, Temu has recently limited its platform to only the items shipped from U.S. warehouses. The company announced it is suspending shipments of all products from China to the U.S. Now, it shows those same items as out of stock. At first glance, this major reversal highlights Temu’s ongoing challenge of making sense of U.S. tariffs that complicate its business model.
Increasing the de minimis threshold is a key provision for increasing bilateral cross-border trade. It allows the hassle-free movement of insignificant value items across borders. The recent executive order left Temu with little choice but to recalibrate its approach. Today, the company faces increased costs from tariffs on goods it imports from China.
As Temu adjusts its strategy, it seems to be moving away from the long free-shipping period. It’s taking big steps to localize its supply chain. The firm is actively seeking U.S. brands and merchants to sell through its platform. Their aim is to expand the list of goods that can be imported into the country, sidestepping high tariffs.
“Temu has been actively recruiting U.S. sellers to join the platform,” – Temu spokesperson
This recruitment initiative reflects Temu’s commitment to adapting to market conditions and ensuring a smooth shopping experience for its customers. Through a focus on U.S.-based sellers and products, the company seeks to continue being competitive even as the new regulatory environment comes into play.
As businesses navigate evolving trade policies, retailers like Temu must remain agile and responsive to thrive in the ever-changing market.
