Temu and Shein to raise US prices, slash ads as Trump’s new China tariffs take effect

Temu and Shein to raise US prices

Chinese e-commerce platforms Temu and Shein have begun pulling back advertising and will raise prices in the US by the end of April as they adjust to sweeping new tariffs imposed by the Trump administration. The move comes in response to the closure of the "de minimis" loophole, which had allowed goods worth under $800 to enter the US duty-free. Starting May 2, duties of 90% of parcel value or flat fees of $75 to $150 will apply to such shipments, dramatically increasing their operating costs, the Financial Times reported.

Advertising pullback hits Meta, Google, and others
Temu slashed its spending on platforms like Meta, X, and YouTube by an average of 31% in the two weeks leading to April 13, according to data from Sensor Tower. It also stopped spending entirely on Google Shopping after April 9, the day broader China tariffs came into effect. Shein followed suit, cutting daily average ad spend across major platforms by 19% in early April and halving its YouTube ad budget year-on-year.

Email alerts warn of April 25 price increase
Both Temu and Shein emailed customers on Wednesday, citing “global trade rules and tariffs” as reasons for “price adjustments” starting April 25. The changes signal a broader shift for the retailers, who rapidly expanded in the US post-pandemic by offering ultra-cheap goods and launching aggressive marketing campaigns to challenge Amazon and other Western rivals.

Social media platforms feel the pinch
The advertising retreat could dent revenues at companies like Meta and Alphabet. Meta, for instance, earned $18.4 billion from China-based advertisers in 2023—more than 10% of its global revenue. In its financial disclosures, the company has flagged tariffs and trade tensions as a risk to its ad business, which includes resellers and intermediaries working with Chinese brands.

A blow to Temu and Shein’s growth strategy
Both retailers had relied on heavy ad spending to fuel rapid US growth, despite each holding less than 1% of the domestic e-commerce market, according to Consumer Edge. Temu, which was the top US advertiser on Elon Musk’s X in 2024, has outspent rivals dramatically but is now pulling back. Analysts warn that without deep brand loyalty, reduced ad visibility could hurt sales. “They need to constantly advertise to keep customers,” said James McDonald of WARC.

Policy change targets China’s low-cost export strategy
The end of the de minimis exemption, which had allowed more than 1.5 million daily tariff-free shipments into the US, primarily benefits Western retailers who have accused Temu and Shein of unfairly undercutting them with low-quality goods. “The decision to close the de minimis loophole has been like a targeted weed killer,” said analyst Mike Ryan from Smarter Ecommerce.

Tariff pressure still rising
While the new duties on small parcels are significant, they are still lower than the cumulative 125% tariffs applied to many other Chinese imports under Trump’s broader trade war. Nonetheless, the impact is already visible as Chinese e-commerce firms recalibrate their US strategies and look for ways to absorb rising costs.