Temu and SHEIN Adapt Strategies in Response to New U.S. Tariff Policy: Raise Prices and Reduce Advertising Costs

Taiwan • Business • 04/17 18:05
Temu and SHEIN Adapt Strategies in Response to New U.S. Tariff Policy: Raise Prices and Reduce Advertising Costs

The United States has eliminated the "de minimis" tax exemption policy and levied high tariffs on Chinese goods, impacting Chinese e-commerce platforms like Temu and SHEIN. Both companies have raised their U.S. prices as of April 25 and cut back on advertising expenses to manage rising costs. This action highlights how shifts in U.S.-China trade policies are affecting cross-border e-commerce, forcing these platforms to balance cost control with maintaining their market presence amid policy pressures.

Key Updates

04/18 11:07

Due to trade tensions, China's airlines have suspended receiving Boeing 737 MAX aircraft, with several planes returning to the United States.

Chinese airline companies have suspended the receipt of Boeing 737 MAX aircraft due to the new round of U.S. tariff policies. At least one aircraft, which was originally scheduled for delivery to Xiamen Airlines, has been returned to Seattle from Zhoushan, Zhejiang. This action is linked to the rising trade tensions between the U.S. and China, as China has reportedly asked domestic airlines to suspend the purchase of American aircraft and components as a countermeasure. Consequently, Boeing's delivery process to China is encountering significant hurdles.

04/18 09:06

Apple CEO Tim Cook successfully secured tariff exemptions from the U.S. government for electronic products, helping ease U.S.-China trade tensions.

Amid rising US-China trade tensions and the US imposing a 145% tariff on Chinese goods, Apple CEO Tim Cook successfully communicated with high-level officials, including US Commerce Secretary Wilbur Ross, to secure a temporary tariff exemption for products such as iPhones and Macs from the Trump administration. This move offers breathing space for Apple and other US tech companies like HP and Dell. Although the White House denies offering preferential treatment to specific companies, Trump admitted to having helped Cook, indicating that this resulted from high-level policy negotiations.

04/18 05:07

Chinese e-commerce apps dominate the US iOS store, with tariff policies spurring a "reverse purchasing" trend.

In April 2025, the United States imposed tariffs as high as 245% on Chinese goods, which unexpectedly prompted American consumers to shop directly on Chinese e-commerce platforms such as DHgate, Taobao, and Shein, and even travel to China to go on shopping sprees. These platforms experienced a surge in rankings on the US iOS App Store, with DHgate downloads increasing by 800% and Taobao downloads by 300%. This trend was driven by social media, as consumers looked to bypass brand markups and redefine the cross-border shopping experience.

04/18 02:38

The U.S. Imposes Port Fees on Chinese Ships as the Trump Administration Escalates the Trade War

On April 17, 2025, the Office of the United States Trade Representative announced a port fee policy targeting Chinese ship port fees, set to take effect 180 days later. This policy originates from an investigation conducted during the Trump administration, accusing China's shipbuilding industry of gaining unfair advantages through subsidies and monopolistic practices. The new measures impose high fees on ships built in or owned by China, featuring tiered rates and exemption conditions, aiming to diminish China's influence in the global shipping industry and foster the growth of the American shipbuilding industry.

04/17 23:05

Starlux Airlines' Response to U.S. Ending Duty-Free Status for Chinese Imports: Monitoring a 90-Day Cargo Shipping Surge

The United States will cancel the duty-free policy for small air packages for imported goods from China on May 2, 2025, leading to fluctuations in the global air cargo market. According to Liu Yunfu, Chief Strategy Officer of Starlux Airlines, despite a "90-day shipping surge," shippers have not shown increased willingness to ship, indicating uncertainty in the market about the policy. Starlux Airlines offers slightly lower freight rates on North American routes compared to its competitors due to its different product mix and cargo size structure. This policy change presents a challenge for e-commerce platforms' small air package business.

04/17 18:05

Temu and SHEIN Adapt Strategies in Response to New U.S. Tariff Policy: Raise Prices and Reduce Advertising Costs

The United States has eliminated the "de minimis" tax exemption policy and levied high tariffs on Chinese goods, impacting Chinese e-commerce platforms like Temu and SHEIN. Both companies have raised their U.S. prices as of April 25 and cut back on advertising expenses to manage rising costs. This action highlights how shifts in U.S.-China trade policies are affecting cross-border e-commerce, forcing these platforms to balance cost control with maintaining their market presence amid policy pressures.

04/17 16:37

Trump advocates for a 245% secondary tariff to counter China's influence: E-commerce shipping is rerouting through Southeast Asia, and Taobao's shipping costs could rise by 10% to 20%.

In early 2025, former U.S. President Trump initiated a 245% tariff on Chinese goods, leading to changes in global supply chains and cross-border e-commerce logistics models. Chinese e-commerce platforms and freight forwarders rerouted goods through Vietnam, Malaysia, Singapore, and other locations before exporting them to Taiwan and the U.S. to circumvent the high tariffs. This action increased transportation costs by 10% to 20% and extended delivery times up to a month, affecting platforms like Taobao. The U.S. removed the de minimis tax exemption threshold, further intensifying logistics pressure, turning Southeast Asia into a new hub for transshipment and production.

04/17 10:40

Trump's revocation of low-cost duty-free policies severely impacts fast fashion and Boeing, worsening the challenges faced by American manufacturing, while benefiting slow fashion and resale platforms.

Starting on May 2, 2025, President Trump of the United States will sign an executive order to remove the "low-value duty-free" tariff exemption on goods from China and Hong Kong, affecting imports valued under $800. This policy severely affects fast fashion brands like Shein and Temu, which rely on Chinese supply chains, forcing them to increase prices and reduce advertising spending. Boeing is facing a crisis as the U.S.-China trade war escalates, reflecting structural problems in American manufacturing. In contrast, slow fashion and second-hand resale platforms like ThredUp and The RealReal are benefiting from localized supply chains and sustainable practices.

04/17 09:07

Malaysia's Trade Minister Warns: US Tariff Policy Could Cause iPhone Prices to Soar to the Price of a Car

Malaysia's Minister of Investment, Trade and Industry, Tengku Zafrul Abdul Aziz, warned that if the United States continues to raise tariffs on Chinese goods, the price of Apple iPhones could skyrocket to be as expensive as cars. Although smartphones are temporarily exempt from tariffs, future policies remain uncertain. Malaysia has initiated negotiations with the United States to negotiate for more exemptions during the 90-day temporary reprieve to lessen the impact on Malaysia's export industry.

04/17 08:38

Due to the China-US tariff war, Tesla halts new car plans, putting Musk under multiple pressures.

Tesla announced the suspension of the trial production plans for the self-driving taxi Cybercab and the electric truck Semi due to the high tariffs the United States imposed on parts imported from China, which led to soaring costs. This decision has severely disrupted the product timeline, putting CEO Elon Musk under pressure from shareholders and the market. Tesla plans to release its first-quarter 2025 financial report on April 22, as investors closely watch how the company tackles challenges such as supply chain disruptions, sluggish sales, and brand controversies.

Changes in Tariff Policy Reshape the Cross-Border E-commerce Dynamics

In early April 2025, President Trump of the United States announced a new round of tariff measures on imports from China and Hong Kong, eliminating the "de minimis" tax exemption previously applicable to small packages under $800. According to an executive order issued by the White House, starting May 2, these packages will no longer enjoy tax-free benefits and will be subject to ad valorem tariffs ranging from 120% to 145%.

This policy change has significantly impacted cross-border e-commerce platforms that focus on low-priced goods and rely on the Chinese supply chain. According to data from the U.S. Congressional Research Service and customs, over 1.4 billion "de minimis" packages entered the U.S. in 2023, most of which came from China. Temu and SHEIN have been able to offer highly competitive prices in the U.S. market through the tax-free import mechanism.

Temu and SHEIN Simultaneously Raise Prices

Facing rising import costs, Temu and SHEIN recently issued almost identical notices to U.S. consumers, announcing that they will adjust product prices starting April 25. Both companies noted in their statements that recent changes in global trade rules and tariff policies have led to increased operating expenses, necessitating price adjustments.

SHEIN stated on its website: "Our operating costs have risen due to recent policy changes, and to continue providing our services, we will be adjusting prices." Temu mentioned in its announcement: "We encourage customers to purchase before the price adjustment to enjoy current promotional prices."

Currently, the price of dresses on SHEIN's website ranges from $6 to $91, while Temu's product prices range from $2.48 to $210. Although neither company has disclosed specific details of the price increase, they have clearly indicated that price adjustments are necessary.

Significant Reduction in Advertising Expenditure to Control Costs

In addition to adjusting prices, Temu and SHEIN have also simultaneously reduced their digital advertising spending in the U.S. as another strategy to address cost pressures. According to data from market intelligence agency Sensor Tower, in the two weeks ending April 13, Temu's advertising spending on platforms like Meta (Facebook and Instagram), X (formerly Twitter), and YouTube decreased by an average of 31%. Data from Smarter Ecommerce indicates that since April 9, Temu has completely stopped sponsored videos and shopping ads on TikTok and Google.

SHEIN's advertising spending has also seen a noticeable decline. Sensor Tower noted that in the first two weeks of April, SHEIN's daily average advertising spending on platforms like Meta, TikTok, YouTube, and Pinterest decreased by 19%, almost halved compared to the same period last year, with the most significant reduction in YouTube advertising.

These figures show that both companies are actively compressing their marketing budgets to cope with the pressure of rising operating costs and policy uncertainties.

Business Model Faces Challenges

The success of Temu and SHEIN has largely relied on the tax advantages provided by the "de minimis" policy, allowing them to enter the U.S. market at extremely low prices and rapidly expand their market share through extensive digital advertising. However, with drastic changes in the policy environment, this business model is encountering unprecedented challenges.

According to a report by CBS News, the download numbers of Temu and SHEIN's apps have shown a significant decline. Temu, which had consistently ranked in the top five of the U.S. Apple Store for the past two years, has dropped to 75th place; SHEIN has fallen from 15th place last month to 58th. Although both companies continue to emphasize in their statements that they will "strive to maintain price competitiveness" and "ensure smooth order delivery," their market visibility and user loyalty are being tested.

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People Also Ask...

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In response to the new U.S. tariff policy, what other strategies are Temu and SHEIN using to tackle these challenges, besides raising prices and cutting advertising?

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How will Temu and SHEIN's pricing changes affect the competitiveness of the US market?