Temu Stops Shipping from China to U.S. as De Minimis Tariff Exemption Expires

Temu, a Chinese retailer, transitioned to a local fulfillment model in the U.S. to avoid high tariffs following the expiration of the de minimis exemption, maintaining competitive pricing.

Key Points

• Business Model Overhaul: Temu, a China-based retailer, shifted its model by stopping shipments of Chinese-made goods to the U.S. after tariffs on low-value parcels increased. The move aligns with changes in U.S. tariff policies that affected import costs, prompting Temu to transition to a local fulfillment model with U.S.-based sellers.

• Local Fulfillment Strategy: To maintain pricing stability for U.S. consumers, Temu now relies on domestic warehouses and sellers. Products labeled as "local" on the website are tariff-free, supporting local merchants and reducing import charges.

• Consumer Impact and Response: The overhaul responded to consumer concerns about rising costs due to tariffs. Temu previously warned of impending price hikes and adjusted its offerings to mitigate the impact on U.S. shoppers, emphasizing local sourcing and fulfillment.

Temu, a China-based low-cost retailer, has revamped its business strategy by ceasing direct shipments of Chinese-made goods to U.S. customers. This shift followed the expiration, on May 2, of the “de minimis exemption,” which previously allowed low-value parcels to enter the U.S. duty-free. The Trump administration’s recent closure of this loophole means Temu’s Chinese-sourced products are now subject to high tariffs, impacting their attractiveness to American consumers.

To maintain competitive pricing, Temu transitioned to a local fulfillment model where all U.S. sales are now handled by domestic sellers, with products stored in U.S. warehouses. By focusing on locally based merchants, Temu avoids import tariffs that could reach up to 145% on Chinese-made goods. The company is actively recruiting U.S. sellers, aiming to expand their customer base and support local businesses.

Temu’s website now highlights items stored in local warehouses, assuring shoppers they will incur no import charges or additional fees upon delivery. This change came after U.S. consumer complaints about excessive tariff surcharges, sometimes exceeding the merchandise value, discouraged online purchases. After warnings of impending price hikes due to tariff increases, Temu informed customers of cost adjustments beginning April 25, 2025, to continue offering quality products despite rising operational expenses.

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