Temu's Response to Changes in U.S. Tariff Policies: Halts Direct Shipping from China, Shifts Focus to U.S. Warehouses and Local Sellers

Taiwan • Business • 05/05 14:01
Temu's Response to Changes in U.S. Tariff Policies: Halts Direct Shipping from China, Shifts Focus to U.S. Warehouses and Local Sellers

Faced with the U.S. terminating the "small package tax exemption" policy and increasing import tariffs on Chinese goods, Chinese e-commerce platform Temu has stopped direct shipments from China to the U.S., instead choosing to supply from local U.S. warehouses and recruiting local U.S. sellers. This move is a response to the pressure of tariffs as high as 145%, signifying Temu's shift from a low-cost strategy to a local fulfillment model.

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Temu's Response to Changes in U.S. Tariff Policies: Halts Direct Shipping from China, Shifts Focus to U.S. Warehouses and Local Sellers

Faced with the U.S. terminating the "small package tax exemption" policy and increasing import tariffs on Chinese goods, Chinese e-commerce platform Temu has stopped direct shipments from China to the U.S., instead choosing to supply from local U.S. warehouses and recruiting local U.S. sellers. This move is a response to the pressure of tariffs as high as 145%, signifying Temu's shift from a low-cost strategy to a local fulfillment model.

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Temu Ends Direct Shipping from China

In the early hours of May 2, 2025, the United States officially ended the "de minimis" tax exemption policy, which since 2016 had allowed import packages valued under $800 to be exempt from tariffs. This policy was crucial for Chinese e-commerce platforms like Temu to enter the U.S. market at very low prices. With the policy's termination, Temu announced a complete halt to direct shipments from China to the U.S., and all U.S. orders will now be processed through local warehouses.

According to an announcement on Temu's U.S. website, all products are now marked as shipped from "local warehouses," highlighting "no import fees and no extra shipping costs." Products previously shipped directly from China are now shown as "sold out" or "out of stock." This change follows the U.S. government's imposition of tariffs as high as 145% on Chinese goods, and Temu's action is viewed as a strategy to circumvent high import taxes.

Warehouse and Supply Chain Restructuring

As early as the beginning of 2024, Temu began restructuring its supply chain. According to Bloomberg, Temu required Chinese suppliers to ship products in bulk to U.S. warehouses instead of sending them directly to consumers. This strategy allowed Temu to establish a certain level of local inventory before the policy change, preparing for the transition.

Currently, Temu's U.S. website only displays products that can be shipped from local warehouses, with delivery completed through the U.S. logistics system. This not only helps avoid high tariffs but also shortens delivery times, enhancing the consumer experience. However, this transition also brings challenges of inventory pressure and product shortages. Users on social media have reported that several items in their shopping carts suddenly became unavailable, indicating the platform is in a transition period.

Actively Recruiting Local U.S. Sellers

To strengthen the local supply chain, Temu has simultaneously launched a local seller recruitment program. According to a Temu spokesperson in an interview with CBS News, all U.S. sales on the platform are currently handled by local sellers, emphasizing that this strategy aims to assist local businesses in reaching more customers and expanding their operations.

Temu has posted recruitment ads on its website and social media platforms, encouraging U.S. small businesses and individual sellers to join the platform, provide products, and fulfill orders from local warehouses. This initiative not only helps expand the source of product supply but also establishes a more flexible supply chain structure for the platform.

Pricing Strategy and Market Reaction

Although Temu claims that the prices of its products in the U.S. market "remain unchanged," reports from The Wall Street Journal and Fashion Dive suggest that prices for some products on the platform have risen, with hikes as high as 100%. This may be related to supply chain restructuring, rising warehousing costs, and increased local fulfillment expenses.

Additionally, Temu had posted an announcement on its website in late April, forecasting price adjustments in response to "global trade rules and tariff changes." Although this announcement is still on the website, Temu recently stated that it would not raise prices, indicating that its pricing strategy is still being adjusted.

Ripple Effects on Air Cargo and Logistics Industry

The transformation of Temu and other Chinese e-commerce platforms is also impacting the global logistics industry. According to Nikkei Asia, with the end of the de minimis policy, airlines such as Air China, China Cargo Airlines, and China Southern Airlines have begun canceling cargo flights on U.S.-China routes. Hong Kong's Cathay Pacific has also established a cross-departmental task force to adjust its cargo strategy in response to the new tariff policy.

Logistics consulting firm Cirrus Global Advisors pointed out that the cancellation of the tax exemption policy and the imposition of tariffs will lead to a decline in e-commerce demand by more than 80%, with air cargo operators expected to lose $22 billion in revenue over the next three years. Temu's transformation actions are unfolding against this backdrop, demonstrating its swift response and adaptability to policy changes.

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