KEY POINT SUMMARY: Temu and Shein raise prices
- Temu and Shein raise prices for U.S. buyers due to Trump’s new tariffs.
- A 145% import tax and the end of duty-free exemptions impact low-cost goods.
- Both companies posted nearly identical warnings of coming price hikes.
- Influencer-heavy ad strategies are now scaled back as costs surge.
- Amazon eyes opportunity with low-cost storefront to rival both platforms.
Price Hikes Hit Shoppers As Trade War Heats Up
Chinese-founded e-commerce giants Temu and Shein are raising prices for U.S. consumers, signaling the first direct retail fallout from former President Donald Trump’s aggressive new tariffs. Both platforms announced “price adjustments” set to begin on April 25, citing increased operating costs from global trade rule changes.
The hikes come after Trump imposed a 145% tariff on Chinese imports and ended the “de minimis” rule, which had previously allowed goods under $800 to enter the U.S. duty-free. The new policies, set to take effect May 2, mark a dramatic escalation in U.S.-China trade tensions.
Ultra-Cheap Platforms Feel The Pressure
Temu and Shein have upended online shopping in America, offering ultra-cheap items directly from factories in Asia. Their rise has squeezed Western brands and flooded platforms like TikTok and Instagram with influencer marketing.
But their low-cost model relied heavily on the de minimis loophole. According to U.S. Customs data, up to 4 million parcels arrive daily under this exemption, many from China. Once revoked, these packages will now face the full weight of the import tax.
Temu, owned by PDD Holdings, and Shein, now based in Singapore, issued nearly identical statements explaining that the tariff changes forced them to adjust pricing.
“We’re doing everything we can to keep prices low,” Temu’s notice read. “But due to these changes, we must make adjustments.”
Trump’s Tariff Targets Chinese E-Commerce
The de minimis rollback is a key component of Trump’s crackdown on Chinese trade practices. U.S. officials argue the policy gave companies like Temu and Shein an unfair edge, while opening the floodgates for counterfeit goods and illicit substances.
Law enforcement agencies and trade groups have long criticized the rule, framing it as a national security and economic concern. Trump responded with an executive order earlier this month, declaring an end to duty-free treatment for China and Hong Kong-origin shipments.
Digital Ad Spending Slows As Costs Mount
Faced with rising costs, both companies have begun cutting back advertising budgets, which had been among the largest on social media. Analysts say the shift could hurt platforms like Instagram, TikTok, and Snap, all of which rely heavily on e-commerce promotions.
Last year, Shein and Temu dominated mobile ad spending. But according to Sensor Tower, that pattern has shifted sharply in recent weeks, just as the price hikes were being planned.
Meanwhile, Amazon is positioning itself to absorb market share. The retail giant recently launched a budget storefront offering under-$20 items, many similar to Temu’s catalog of household goods and small electronics.
Customers Urged To Shop Now Before Tariffs Hit
As the Temu and Shein raise prices notices spread, both companies encouraged buyers to make last-minute purchases before April 25. Their online stores remain stocked, they say, but prices will shift in response to the policy change.
“We’ve stocked up and stand ready to make sure your orders arrive smoothly during this time,” Temu wrote. “We appreciate your support and understanding.”
The extent of the price increases remains unclear, but shoppers who’ve come to rely on $3 kitchen gadgets and $5 dresses may soon face sticker shock. As U.S.-China tensions ramp up, the age of ultra-cheap online shopping could be on the brink of a costly transformation.
