China-founded e-commerce sites Temu and Shein say they plan to raise prices for U.S. customers starting next week, a ripple effect from President Donald Trump's attempts to correct the trade imbalance between the world's two largest economies by imposing a sky-high tariff on goods shipped from China.
Temu, which is owned by the Chinese e-commerce company PDD Holdings, and Shein, which is now based in Singapore, said in separate but nearly identical notices that their operating expenses have gone up “due to recent changes in global trade rules and tariffs.”
Both companies said they would be making “price adjustments” starting April 25, although neither provided details about the size of the increases. It was unclear why the two rivals posted almost identical statements on their shopping sites.
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Since launching in the United States, Shein and Temu have given Western retailers a run for their money by offering products at ultra-low prices, coupled with avalanches of digital or influencer advertising.
The 145% tariff Trump slapped on most products made in China, coupled with his decision to end a customs exemption that allows goods worth less than $800 to come into the U.S. duty-free, has dented the business models of the two platforms.
E-commerce companies have been the biggest users of the widely used exemption. Trump signed an executive order this month to eliminate the “de minimis provision” for goods from China and Hong Kong starting May 2, when they will be subject to the 145% import tax.
As many as 4 million low-value parcels — most of them originating in China — arrive in the U.S. every day under the soon-to-be canceled provision.
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U.S. politicians, law enforcement agencies and business groups lobbied to remove the long-standing exemption, describing it as a trade loophole that gave inexpensive Chinese goods an advantage and served as a portal for illicit drugs and counterfeits to enter the country.
Shein sells inexpensive clothes, cosmetics and accessories, primarily targeting young women through partnerships with social media influencers. Temu, which promoted its goods through online ads, sells a wider array of products, including household items, humorous gifts and small electronics.
Last year, the companies were among the largest advertising spenders on social media platforms, but they've both slashed that spending in recent weeks, according to data analytics provider Sensor Tower. That could be bad news for the platforms such as Facebook, Instagram, Snap, X and TikTok that rely on advertising.
In November, American e-commerce giant Amazon launched a low-cost online storefront featuring electronics, apparel and other products priced at under $20. Many of the electronics, apparel and other products on the storefront on Wednesday resembled the types of items typically found on Shein and Temu.
In their customer notices about the pending price increases, the companies encouraged customers to keep shopping in the days ahead.
“We've stocked up and stand ready to make sure your orders arrive smoothly during this time,” Temu's statement said. “We're doing everything we can to keep prices low and minimize the impact on you.”
