Temu, the Chinese e-commerce platform renowned for its ultra-low-cost goods, has ceased direct shipments from China to the United States as of early May 2025. This significant shift follows President Donald Trump's executive order terminating the "de minimis" tariff exemption for Chinese imports.
What Was the De Minimis Exemption?
The de minimis exemption allowed goods valued under $800 to enter the U.S. without incurring import duties. This provision was instrumental for platforms like Temu and Shein, enabling them to offer competitively priced products by shipping directly from China. In 2024 alone, approximately 1.36 billion packages entered the U.S. under this exemption, nearly doubling from 2020 figures.
Impact on Temu's Business Model
With the exemption revoked, Temu has transitioned to a local fulfillment model. The company now restricts U.S. customers to viewing and purchasing items stocked in domestic warehouses, effectively eliminating direct-from-China listings . Temu asserts that consumer prices will remain unchanged; however, experts anticipate potential price increases due to added import fees and taxes, which could significantly affect the platform's pricing advantage.
Broader Implications
The policy change not only affects Temu but also other Chinese e-commerce giants like Shein and AliExpress, which heavily relied on the de minimis provision. The U.S. government's decision aims to address concerns over illicit shipments and unfair competition faced by domestic retailers . Additionally, the move is expected to alleviate the strain on U.S. customs resources caused by the massive influx of small package imports.
Temu's strategic pivot underscores the challenges international e-commerce platforms face amid evolving trade policies. As the company adapts to a new operational landscape, U.S. consumers may experience changes in product availability and pricing.