Temu Adds 145% Import Charges Following Tariff Changes

Chinese e-commerce platform Temu has begun imposing significant “import charges” on U.S. customers, with fees ranging from 130% to 150% of item prices following President Trump’s elimination of a key tariff exemption. The additional charges, which started appearing over the weekend, effectively more than double the cost of many products, fundamentally altering the bargain-shopping experience that propelled the platform to prominence in American retail.

A CNBC analysis found numerous examples of how these charges dramatically impact final prices. One summer dress priced at $18.47 now costs $44.68 after a $26.21 import charge—a 142% increase, according to CNBC. These charges align closely with the 145% tariff rate now applied to Chinese imports, suggesting Temu is directly passing these costs to consumers rather than absorbing them.

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De Minimis Elimination Transforms Business Model

The price increases follow President Trump’s recent executive order eliminating the “de minimis” exemption that previously allowed packages valued under $800 to enter the U.S. duty-free. This exemption, which takes effect May 2, was particularly vital to Temu’s business model, as it enabled the direct-to-consumer shipping strategy that kept prices extraordinarily low.

“The de minimis exemption was designed for a pre-digital era, allowing small value parcels to enter without customs duties or formal entry requirements,” economist Thiemo Fetzer told Newsweek. “This made sense when international shipping of small parcels was rare, but these Chinese platforms essentially industrialized this exception,” as reported by Newsweek.

Consumer Reaction Turns Negative

Customer reaction has been swift and largely negative as shoppers encounter dramatically higher prices. On Reddit forums dedicated to Temu shoppers, users have posted disappointed reactions to the price increases. One thread titled “R.I.P. Temu, it was nice while it lasted” featured a user lamenting that prices “went flying up” on Friday, while another commented, “From shopping like a billionaire to shopping like a peasant in one day.”

The company had warned customers earlier this month that price adjustments would be necessary, stating in a notice: “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,” as quoted by CNN Business.

Strategic Shift to Local Shipping

In response to the tariff challenges, Temu appears to be strategically pivoting toward promoting products that ship from U.S. warehouses rather than directly from China. A recent analysis of Temu’s “lightning deals” page showed more than 75% of featured products labeled with a “local” tag and highlighted with “no import charges” banners, according to CNBC.

This shift represents a significant adjustment to Temu’s supply chain strategy, potentially requiring substantial investments in U.S. warehousing and inventory management—costs that could further impact the company’s pricing structure and profitability calculations. Unlike competitor Shein, which has opted to incorporate tariffs into listed prices, Temu’s approach of separating import charges provides consumers with transparent visibility into the tariff impact.

Advertising Pullback Signals Broader Strategy Change

Concurrent with its pricing adjustments, Temu has dramatically reduced its U.S. advertising expenditures. The company’s share of Google Shopping ad impressions plummeted from 40% to zero between April 1-12, according to Digiday. Its mobile app has fallen to 73rd position in Apple’s App Store rankings after consistently placing in the top 10.

“In digital advertising, a lot of the growth we saw, particularly in 2023, but continuing into 2024, was driven by Temu’s massive ad spending,” noted market analysts. The reduction in marketing investment suggests the company may be reevaluating its U.S. growth strategy in light of the fundamental economic changes imposed by the new tariff structure.

Retail Competitors See Opportunity

As Temu adjusts to the new economic reality, competing retailers are positioning themselves to capture disaffected bargain hunters. Amazon, which launched its “Amazon Haul” storefront in November 2023 specifically to compete with Temu, has introduced a “Brand Faves” section featuring name-brand items shipped from U.S. warehouses, providing an alternative that avoids the tariff impacts, as detailed by TheStreet.

An Omnisend survey suggests about 29% of Americans would immediately stop or reduce purchases from Chinese sellers if prices rise, indicating a potentially significant customer migration to alternative retailers. This consumer behavior shift could reshape the discount retail landscape as price-sensitive shoppers reevaluate their purchasing options.

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