Temu halts shipping direct from China as de minimis tariff loophole is cut off

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PDD Holdings Inc.’s e-commerce sensation—similar to Shein Group Ltd. in its rapid rise with low-cost products ranging from clothing to household goods—is pivoting to a “local fulfillment” strategy. According to a statement from Temu, the platform is now actively recruiting U.S.-based sellers and will focus exclusively on selling their domestically stocked merchandise. This approach is intended to help the Chinese-owned platform avoid tariffs, while Temu claims it will keep prices stable for American consumers.This shift comes as major players like Shein and Alibaba Group Holding Ltd. contend with rising import duties and the end of the “de minimis” tariff exemption for low-value shipments. Without that exemption, companies such as Temu and Shein have faced sharply higher costs in the U.S. Former President Donald Trump introduced these tariffs to pressure China into negotiating a trade deal to reduce the U.S. trade deficit. Trump has publicly stated that China should absorb the tariff costs.Temu explained that this change is meant to “help local merchants reach more customers and grow their businesses,” and is “part of Temu’s ongoing adjustments to improve service levels.”As of last week, Temu appeared to be passing most of the Trump-era import taxes directly to consumers, with added surcharges shown clearly at checkout. Shein, likewise, significantly raised its U.S. prices—by over 300% for some items.In February, Temu instructed Chinese manufacturers to begin bulk-shipping products to U.S. warehouses under a “half-custody” model, where Temu manages the platform but not the full logistics. However, as U.S. inventories are drawn down, prices may rise if tariffs on Chinese goods continue at their current 145% level.So far, major American retailers have not increased shelf prices, but they are under pressure, as Chinese suppliers are unwilling to cover the tariffs and uncertainty looms over how long the extra duties will remain in effect.