Temu halts direct shipments from China to US amidst tariff changes

Response to US crackdown on "de minimis" trade loophole allowing packages valued under $800 to enter without tariffs

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Temu, the Chinese e-commerce platform known for ultra-cheap goods shipped directly from China, has ceased this practice of shipping to US-based customers following the US government's crackdown on the "de minimis" trade loophole.

This loophole, stemming from a 1938 law, previously allowed packages valued under $800 to enter the US without tariffs.

The federal government, motivated by concerns over illicit shipments and unfair competition for domestic retailers, has closed this exemption.

As a result, Temu is shifting its US. operations to a local fulfillment model, with all sales now handled by US-based merchants.

While the company states that consumer prices will remain unchanged, experts suggest the imposition of import fees and taxes could raise costs significantly—potentially over 100% of a product’s value.

This policy change is part of a broader effort to address concerns over the influx of low-cost imports and to ensure fair competition for American businesses.

The end of the de minimis exemption has significant implications for e-commerce platforms that relied heavily on this provision to offer competitive pricing to US consumers.

As these platforms adjust their business models, consumers may experience higher prices and changes in product availability.

The closure of the de minimis loophole is expected to have a ripple effect across the e-commerce industry, prompting other companies to reevaluate their pricing strategies and supply chain operations.

While the long-term impact on consumer prices and supply chains remains uncertain, the situation could result in shortages and higher costs by late 2025.

In summary, Temu's decision to halt direct shipments from China reflects the broader changes in US trade policy and their impact on global e-commerce.

Consumers and businesses alike will need to navigate these changes as the landscape of international trade continues to evolve.