Temu, Shein Raise Prices as Trump’s Tariffs Hit

The landscape of Chinese-owned e-commerce in the U.S. is shifting rapidly as Temu and Shein, two of the largest platforms, adjust their pricing and product availability in response to new tariffs imposed by President Donald Trump. Recent developments have forced both companies to increase prices and temporarily remove certain items from their websites, a move that has left sellers and consumers scrambling to adapt.

How the Tariffs Are Impacting Prices

Chinese sellers on Temu, who specializes in arts and crafts, have reported a significant 50% increase in product prices, with a simultaneous 30% drop in sales. Unlike platforms such as eBay, where sellers set their own prices, Temu dictates pricing, leaving sellers at the mercy of the platform’s adjustments. Although sellers are still receiving the same wholesale payouts from Temu, the price hikes have created uncertainty in demand and overall profitability.

Shein shoppers are also feeling the effects. Customers report that numerous products on their wish lists have suddenly disappeared. Many of these delisted items include beauty products, such as eyelashes and hair accessories, and certain cosmetic lines. Some consumers suspect the removals are temporary, as the companies reassess which products are still viable under the new tariff structure.

Shipping Delays and Uncertainty

Beyond price hikes, sellers are also reporting increased shipping times due to customs delays. The expedited shipping processes that allowed Chinese e-commerce giants to deliver goods within days to the U.S. are now under strain, potentially impacting consumer satisfaction and refund rates.

There have been expressed concerns over extended customs clearance times, saying that delays could prompt customers to leave negative reviews or request refunds. As logistics companies adjust to new tariff requirements, the previously seamless cross-border shipping system is showing cracks.

A Sudden Policy Reversal

In a surprising turn, Trump signed an executive order walking back a major portion of the new tariff policy. Initially, the new rules eliminated a tax exemption known as de minimis, which allowed small packages under $800 to enter the U.S. tariff-free. This exemption was crucial for companies like Shein and Temu, which rely on direct-to-consumer shipping. However, the exemption will now remain in place until the government establishes a system to collect tariffs on the millions of low-value shipments arriving daily.

Despite this temporary relief, uncertainty looms. The executive order states that once an adequate tariff collection system is implemented, the exemption will be removed again. This leaves e-commerce businesses in a constant state of flux, forced to adapt quickly to regulatory changes.

How Are Temu and Shein Adapting?

Both companies have been preparing for regulatory changes by increasing their use of U.S.-based warehouses. As of Friday, Temu’s homepage highlighted products that are already stocked in American warehouses, ensuring they have cleared customs before the tariff changes could take effect. This strategy allows them to maintain competitive pricing and fast shipping, at least for a portion of their inventory.

Additionally, Shein and Temu will likely continue adjusting product availability, potentially removing items that are no longer cost-effective under the new tariff structure. Meanwhile, consumers are left to decide whether the higher prices are still worth the savings these platforms once offered.

The Bigger Picture

The situation with Temu and Shein is part of a larger battle over trade policy and globalization. With over one-third of de minimis shipments to the U.S. originating from China, any disruption to this system has far-reaching implications for e-commerce, international trade, and consumer behavior.

For now, both sellers and shoppers are caught in a whirlwind of uncertainty. While some customers remain loyal, hoping for minimal price increases, others may seek alternative shopping options. As the U.S. government continues to evaluate and refine its trade policies, the only certainty is that the online shopping world will keep evolving.