Temu's withdrawal from US advertising causes a sharp drop in App Store rankings due to US-China tariff policies.

Taiwan • Business • 04/15 08:21
Temu's withdrawal from US advertising causes a sharp drop in App Store rankings due to US-China tariff policies.

Chinese e-commerce platform Temu encountered setbacks in its expansion into the US market. On April 9, 2025, Temu pulled out of Google Shopping ads in the US, leading to its iOS App Store download ranking plummeting from 3rd or 4th place to 58th. This shift happened amid the US raising tariffs on Chinese goods, highlighting Temu's dependence on advertising and its market vulnerability. The new US tariff policy has had a direct impact on its business model.

Key Updates

04/15 14:53

Trump's delay in tariff policy sparks a global shipping rush, causing Taiwan's shipping stocks to soar.

President Trump of the United States announced a 90-day delay in implementing tariffs on most countries, prompting global companies to speed up shipments, causing a surge in transportation. Taiwanese shipping companies such as Wan Hai, Yang Ming, and Evergreen saw their stock prices rise, while EVA Air and China Airlines achieved record revenues. Investment firms such as Yuanta Investment Consulting suggest a bullish strategy until June, with T3EX Global Holdings making a substantial increase in its investment in Yang Ming Marine Transport, reflecting strong market confidence in the short-term outlook for the shipping industry.

04/15 13:49

CBOE Specialist Warns: Uncertainty in U.S. Tariff Policies Could Trigger Ongoing Market Volatility

Experts at the Chicago Board of Options Exchange (CBOE) have noted that the uncertainty surrounding U.S. tariff policies has not yet been fully reflected in market prices, and more intense volatility may occur in the future. The CBOE Volatility Index (VIX) has recently decreased, but experts believe this is just a temporary calm. The Trump administration is set to announce new tariff measures targeting high-tech products like semiconductors, posing challenges to the market due to policy ambiguity and technical pressures.

04/15 12:50

In 2025, Trump Reelected to the White House: New Tariff Policies and Customs Procedures Will Reshape U.S. Trade.

In early 2025, after Donald Trump returned to the White House, he quickly pushed for policy changes that significantly impacted American education and trade. The Trump administration cracked down on diversity, equity, and inclusion programs and reformed the student loan system. On April 2, it announced a 10% tariff on imported goods, excluding those from Canada and Mexico, and imposed tariffs of up to 145% on Chinese goods. The U.S. Customs and Border Protection Agency strengthened enforcement, posing challenges for e-commerce. Under the United States-Mexico-Canada Agreement (USMCA), goods that meet the standards can still be traded duty-free.

04/15 09:48

A CNBC survey reveals American consumers' pessimistic views on the economic outlook, which contrasts with the White House's optimistic expectations.

White House officials state that the U.S. economy is stable and poses no risk of recession, but surveys from CNBC and the Federal Reserve Bank show that consumers and businesses are pessimistic about the economic outlook. The surveys indicate that bringing manufacturing back to the U.S. is challenging, tariff policies are putting more pressure on businesses and consumers, the consumer confidence index is dropping, and corporate executives are warning that recession risks are rising. This highlights the gap between the White House's optimistic outlook and the public's feelings.

04/15 08:50

China suspends accepting Boeing planes in response to the United States' 125% tariff, which poses a significant challenge for Boeing.

On April 15, 2025, the Chinese government ordered domestic airlines to suspend the acceptance of Boeing aircraft and stop purchasing related equipment in response to the United States imposing a 125% tariff. This action challenges Boeing in the Chinese market, and China is considering providing assistance to airlines leasing Boeing aircraft to ease cost pressures.

04/15 08:21

Temu's withdrawal from US advertising causes a sharp drop in App Store rankings due to US-China tariff policies.

Chinese e-commerce platform Temu encountered setbacks in its expansion into the US market. On April 9, 2025, Temu pulled out of Google Shopping ads in the US, leading to its iOS App Store download ranking plummeting from 3rd or 4th place to 58th. This shift happened amid the US raising tariffs on Chinese goods, highlighting Temu's dependence on advertising and its market vulnerability. The new US tariff policy has had a direct impact on its business model.

04/15 06:23

US-China Trade War Intensifies: Foreign Investors Downgrade China's Economic Outlook, Nomura Overhauls Its Operations in China

In April 2025, President Trump of the United States increased tariffs on Chinese goods to 145%, and China responded with a retaliatory tariff of 125%, escalating the U.S.-China trade war. This move impacted global markets, with UBS and Goldman Sachs lowering their forecasts for China's 2025 GDP growth to 3.4% and 4%, respectively. Nomura Holdings reduced its wealth management division in China and shifted its focus to brokerage and asset management. The tariff standoff between the U.S. and China affected China's economy and the layout of foreign investments, and had profound implications for the global economy.

04/15 04:20

Lin Yongxiang, Chairman of DaJiang Biomedical, is Expanding into the U.S. Market Despite the Trend: Stabilizing Prices and Capturing Orders Amid Taiwan Stock Market Volatility, Global Expansion as a Competitive Edge

On April 7, during fluctuations in the Taiwan stock market caused by Trump's "equal tariffs" policy, Chairman Lin Yongxiang of Great Tree Biotechnology (8436) announced that prices would not increase and that the company would expand into the U.S. market. They plan to utilize manufacturing bases in the U.S., China, and Taiwan to offer order transfer and tax optimization solutions. Great Tree Biotechnology has already established manufacturing bases in these regions and has initiated a global expansion strategy to strengthen its supply chain. Lin Yongxiang's strategy includes maintaining price stability, accurately targeting the demand for order transfers, and risk management, helping Great Tree Biotechnology continue to grow amid market fluctuations.

04/15 02:22

South Korea increases support for strategic industries to 33 trillion won to mitigate risks posed by the US-China trade war.

On April 15, 2025, the South Korean government announced that in response to potential U.S. tariff policies and competitive pressures from China, it will provide an additional 7 trillion won (approximately 4.9 billion USD) to support strategic industries like semiconductors, bringing the total aid to 33 trillion won (approximately 23.1 billion USD). The plan includes infrastructure development, low-interest loans, talent development, and international cooperation, focusing on the semiconductor, display panel, battery, and biotech sectors, with the aim of strengthening South Korea's position in the global high-tech supply chain.

04/14 16:22

2025: Trump implemented the "America First" policy: The global status of the dollar is facing challenges

In 2025, President Trump of the United States promoted the "America First" policy, focusing on protectionism and economic nationalism, using tariffs and trade wars to reshape the global economic order, affecting the dollar's global status. The trade deficit widened, foreign investments pulled out, the dollar weakened, and the de-dollarization trend accelerated, creating monetary and geopolitical challenges for the United States. This article examines the policy background, the methods of implementation, and their effects on the dollar's international standing.

Ad Pullout and Ranking Plunge: A Three-Day Freefall from the Top

On April 9th, 2025, Temu abruptly stopped all Google Shopping ads in the US market. According to e-commerce analyst Mike Ryan's observations on LinkedIn, Temu's ad impression share plummeted sharply in a short period and completely disappeared from Google ad auction data by April 12th. This move directly led to its App Store download ranking crashing from 3rd or 4th place to 58th within three days.

A report by Search Engine Land pointed out that there is a high correlation between Temu's App Store ranking and its advertising expenditure. This implies that Temu's user acquisition relies heavily on paid advertising rather than organic traffic or brand loyalty. Ryan noted, "Temu can't afford to turn off ads even for a day." This incident clearly reveals that Temu's growth in the US market is not built on a solid user base but is driven by substantial advertising expenditure to boost downloads and conversions.

Tariff Policy Blow: 125% Tariff and "De Minimis" Exemption Removal

Temu's ad withdrawal is not an isolated incident but is closely related to the recent high tariff policy imposed by the US government on Chinese imports. On April 2nd, 2025, the Trump administration announced tariffs of up to 125% on Chinese imports and removed the "de minimis" exemption policy that previously applied to low-value goods. This policy originally allowed imports valued under $799 to be tax-free, which Temu took advantage of by shipping small batches directly from China to US consumers, significantly reducing costs.

According to The Epoch Times, Temu's business model relies on directly sourcing products from Chinese manufacturers and selling them at low prices in the US market. This model is severely disrupted under the new tariff policy. The removal of the "de minimis" exemption means that even small packages valued under $799 are subject to high tariffs, directly increasing Temu's logistics and product costs.

Additionally, according to China Daily Asia, starting May 2nd, all packages from China valued under $800 will face a 120% tariff, which will further increase to 200% on June 1st. This policy not only impacts Temu but also puts pressure on other Chinese cross-border e-commerce companies like Shein.

Vulnerability of the Business Model: Subsidies, Losses, and Dependence

Temu's parent company, PDD Holdings (Pinduoduo Holdings), has long driven Temu's expansion in overseas markets through a subsidy strategy. According to TechNews, many of Temu's individual orders operate at a loss, with growth primarily relying on parent company funding support and advertising investment. This "burning money for market share" strategy appears unsustainable in the face of high tariffs and advertising cost pressures.

Mike Ryan pointed out that once Temu's advertising expenditure stops, its visibility and download volume in the App Store collapse rapidly, indicating its market position is highly dependent on advertising. This also reflects that Temu has not yet established solid brand recognition and user loyalty in the US market.

Chain Reaction in the Digital Advertising Market

Temu's withdrawal also impacts the overall digital advertising market. According to TechNews, after Temu's aggressive spending disappeared, the competitive pressure on Google's ad auction platform eased, leading to a decrease in CPM (cost per thousand impressions). For other advertisers, this could mean lower cost-per-click and conversion costs.

However, this also highlights Temu's significant role in the advertising market. Its exit not only affects itself but also alters the pricing structure of the entire advertising ecosystem.

Regulatory and Trust Issues: Privacy and Product Safety Controversies

In addition to business model and tariff pressures, Temu also faces a trust crisis from regulators and the media in the US market. According to reports from the US-China Economic and Security Review Commission (USCC) and the Center for Strategic and International Studies (CSIS), apps from Temu and its parent company Pinduoduo were found to contain malware capable of bypassing security permissions and accessing users' private information.

Moreover, some clothing and products sold by Temu were found to contain harmful chemicals. A test report from the Korean government indicated that fast fashion clothing on the Temu platform contained levels of lead, cadmium, and phthalates that exceeded safety limits, potentially posing health risks. Although Temu claims to have removed the related products, these incidents have still damaged its brand image.

References

People Also Ask...

faq

What risks does Temu's significant dependence on advertising in the US market pose to its business model in the face of new tariff policies?

faq

After Temu pulled its ads, its ranking on the App Store took a nosedive. What does this mean for investors?

faq

After Temu pulled its ads, its App Store ranking dropped significantly. How does this affect US-China tariff policies?