Adapting E-Commerce Tactics: Temu vs Shein in New U.S. Trade Era

Chinese e-commerce giants Temu and Shein have announced price increases for American consumers following President Trump’s executive order closing a tariff loophole, threatening the ultra-low prices that fueled their explosive growth in the U.S. market.

Key Insights

Temu and Shein will raise prices starting April 25, 2025, due to President Trump’s executive order eliminating the “de minimis” tariff exemption for Chinese imports under $800.
The companies have been shipping approximately one million packages daily to the U.S., exploiting the tariff loophole that allowed duty-free entry for low-value goods.
Both companies have strategically urged customers to purchase items at current prices before the increase takes effect, potentially boosting short-term sales.
The tariff changes come amid escalating trade tensions, with the U.S. imposing tariffs up to 145% on Chinese exports while China has retaliated with 125% tariffs on American goods.
App rankings for both Temu and Shein have dropped significantly in the U.S. App Store since the tariff announcements, and both companies have reduced their advertising spending.

Tariff Loophole Closure Forces Price Increases

Chinese e-commerce platforms Shein and Temu have notified American consumers that they will be raising prices starting April 25, 2025. The price increases come in direct response to an executive order issued by President Trump that eliminates a critical tariff exemption. This “de minimis” provision had previously allowed goods valued under $800 to enter the United States duty-free, creating a significant cost advantage for the Chinese retailers. The exemption has been particularly beneficial for these companies, which ship approximately one million packages daily to American consumers.

Shein’s announcement to customers was direct and strategic, explaining: “Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025.” This message was paired with an implicit encouragement for customers to make purchases “now at today’s rates” before the price increases take effect.

💸🌍📉 Temu and Shein to Raise Prices Amid U.S. Tariff Crackdown on Chinese Imports

🔹 Summary:

Temu and Shein will increase prices on their products starting April 25, as new U.S. tariffs on low-value imports raise operational costs for the fast-fashion and online… pic.twitter.com/rtwmsz1tY0

— PiQ (@PiQSuite) April 16, 2025

Strategic Responses to Changing Trade Landscape

Temu, owned by PDD Holdings, has issued a similar notice about upcoming price adjustments. In their customer communication, Temu offered reassurance stating, “We’ve stocked up and stand ready to make sure your orders arrive smoothly during this time. We’re doing everything we can to keep prices low and minimize the impact on you.” Both companies are attempting to balance necessary price increases with strategies to retain their cost-conscious customer base. The exact amount of the price increases has not been disclosed by either company.

“We’ve stocked up and stand ready to make sure your orders arrive smoothly during this time. We’re doing everything we can to keep prices low and minimize the impact on you.”

The White House has characterized the executive order as “eliminating duty-free de minimis treatment for low-value imports from China, a critical step in countering the ongoing health emergency posed by the illicit flow of synthetic opioids into the U.S.” This reasoning connects trade policy to national security concerns, particularly regarding the importation of illegal drugs. The order will take effect on May 2, giving retailers minimal time to adjust their business models and pricing structures.

Market Impact and Competitive Response

Since the announcement of the tariffs, both companies have seen their app rankings drop significantly in the U.S. Apple Store. This decline signals potential customer hesitation as prices are expected to rise. Additionally, both Temu and Shein have reduced their advertising spending in the American market, with Temu reportedly cutting Google Shopping ads entirely and reducing social media ad spend by 31%, while Shein has decreased its U.S. advertising budget by 19% over the same period.

“turned off all their Google Shopping ads in the US”

The changing landscape has created opportunities for competitors. Amazon has launched “Amazon Haul,” a platform specifically designed to compete with Shein and Temu by offering low-cost products under $20. This strategic move demonstrates how established American retailers are adapting to the competitive pressure from Chinese e-commerce platforms. Meanwhile, other Chinese retail apps like DHgate and Alibaba’s Taobao continue to maintain high rankings in the U.S., suggesting varying impacts across different Chinese-owned platforms.

Broader Trade War Context

The tariff changes represent just one element of a broader trade conflict between the United States and China. The U.S. has imposed tariffs up to 145% on Chinese imports, with potential to reach 245% with additional levies. China has responded with its own 125% tariffs on American exports. This escalating trade tension has significant implications for consumers who have grown accustomed to ultra-low prices on fast-fashion items and household goods.

Both Temu and Shein have faced criticism beyond trade issues, including concerns about potential environmental impacts of fast-fashion and allegations of labor abuses in their supply chains. U.S. lawmakers have expressed growing concern about the exploitation of the duty-free provision, noting that 1.4 billion packages entered the United States under this exemption last year, creating both economic and security vulnerabilities that the new policies aim to address.