New York
CNN
—
Hours after the a key US tariff exemption expired on Friday, Chinese e-commerce site Temu announced it was overhauling its shipping model, sending out all American sales via US-based sellers.
“All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country,” A Temu spokesperson said in a statement early Friday. “Temu has been actively recruiting U.S. sellers to join the platform.”
The change is a major shift for the platform. Temu – and other Chinese e-commerce sites like Shein and AliExpress – had previously used the de minimis exemption, as it was known, to flood the US with ultra-low-price goods. And while US President Donald Trump says that he wants his new tariffs to help bring manufacturing back to the US, the move by Temu shows how major companies could evade that demand and try other tactics.
The de minimis loophole allowed shipments of goods worth $800 or less to come into the United States duty-free, often skipping time-consuming inspections and paperwork. Chinese e-commerce sites arguably took the most advantage of the exemption, flooding the US market with ultra-low-cost products. But with Trump imposing punishing tariffs on all Chinese imports, the millions of Americans who became reliant on those sites could find those cheap goods less affordable.
The vast majority of Shein and Temu products are manufactured in China and imported directly to the US, which is why the prices are so cheap.
Temu’s new business lingo may sound like it’s right up Trump’s alley. But just because a product is shipping to customers from a “local warehouse” doesn’t mean it’s made in the USA.
Sites like Temu and Shein have been building up their US warehouse portfolio for years to lower shipping times. Last year, the Biden administration also began criticizing the de minimis exemption, with Chinese shippers sensing a clear vibe shift.
Shein began stockpiling goods, bulk shipping to US warehouses as early as last year, Chris Tang, a professor of global supply chain management at the University of California, Los Angeles, previously told CNN.
Bloomberg reported in February that Temu began overhauling its Chinese supply chain, asking supplier factories to ship items in bulk to US warehouses. When those items run out, it’s unclear if they will stay sold out for US consumers, or if new items will be subject to the tariffs Trump has placed on China.
For now, that means foreign-made products are arriving on Americans’ doorsteps through US distributors. Temu does not publicly list its manufacturer partners.
Tang said on Friday that if there are shortages, Temu has few options. The company could re-order its products, which would cost time and money. The site could begin to offer “substitutes,” or recommendations of similar products in stock. Or, it could raise prices.
Temu already began raising prices last week.
Temu says on its website there are no import charges or extra costs on delivery for items purchased from local warehouses. On social media, users say items are already out of stock.
One user on Reddit noted that on Friday, about 60 of the items in their cart were suddenly unavailable.
Some Temu items are not available locally, another user noted, writing that their digital cart of more than 300 items dwindled to two. On top of that, the user said an additional fee was applied unless a “local order” totaled at least $30.
“Temu is gone! What I saw today completely convinced me!” they wrote. “Local sellers, despite obviously buying some items in advance in a bulk, don’t have all these items I was interested in.”
CNN’s Elisabeth Buchwald contributed to this report.
