By Ramishah Maruf, CNN
New York (CNN) – Hours after a key exemption from US costs expired on Friday, the Chinese electronic commerce site Temu announced that it reviewed its shipping model, sending all US sales of US sales.
“All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country,” A Temu spokesperson said in a statement early Friday. “Temu has been actively recruiting U.S. sellers to join the platform.”
The change is a major shift for the platform. Temu – and other Chinese e-commerce sites like Shein and AliExpress – had previously used the de minimis exemption, as it was known, to flood the US with ultra-low-price goods. And while US President Donald Trump says that he wants his new tariffs to help bring manufacturing back to the US, the move by Temu shows how major companies could evade that demand and try other tactics.
The de minimis loophole allowed shipments of goods worth $800 or less to come into the United States duty-free, often skipping time-consuming inspections and paperwork. Chinese e-commerce sites arguably took the most advantage of the exemption, flooding the US market with ultra-low-cost products. But with Trump imposing punishing tariffs on all Chinese imports, the millions of Americans who became reliant on those sites could find those cheap goods less affordable.
The vast majority of Shein and Temu products are manufactured in China and imported directly to the US, which is why the prices are so cheap.
Temu’s new business lingo may sound like it’s right up Trump’s alley. But just because a product is shipping to customers from a “local warehouse” doesn’t mean it’s made in the USA.
Sites like Temu and Shein have been building up their US warehouse portfolio for years to lower shipping times. Last year, the Biden administration also began criticizing the de minimis exemption, with Chinese shippers sensing a clear vibe shift.
Shein began stockpiling goods, bulk shipping to US warehouses as early as last year, Chris Tang, a professor of global supply chain management at the University of California, Los Angeles, previously told CNN.
Bloomberg reported in February that Temu began overhauling its Chinese supply chain, asking supplier factories to ship items in bulk to US warehouses. When those items run out, it’s unclear if they will stay sold out for US consumers, or if new items will be subject to the tariffs Trump has placed on China.
For now, that means foreign-made products are arriving on Americans’ doorsteps through US distributors. Temu does not publicly list its manufacturer partners.
Tang said on Friday that if there are shortages, Temu has few options. The company could re-order its products, which would cost time and money. The site could begin to offer “substitutes,” or recommendations of similar products in stock.
Temu appeared to begin raising some prices last week. But the company in a statement refuted that it is raising prices.
“Temu’s pricing for US consumers remains unchanged as the platform transitions to a local fulfillment model,” the company said in a statement.
Temu says on its website there are no import charges or extra costs on delivery for items purchased from local warehouses. On social media, users say items are already out of stock.
One user on Reddit noted that on Friday, about 60 of the items in their cart were suddenly unavailable.
You do not have some articles TEMU locally, he told another user, writing that his virtual cart of more than three hundred articles has decreased in pairs. In addition to this, the user said that more prices had been implemented unless a “local order” totals at least $ 30.
“Temu left!” What I saw today convinced me absolutely! “They wrote. ” Local vendors, despite the acquisition of safe articles in bulk progress, do not have all those pieces that interested me. “
Elisabeth Buchwald of CNN contributed to this report.
The-CNN-Wire ™
KTVZ Newschannel 21 undertakes to supply a forum for a civil and constructive conversation.
Please keep your respectful and relevant comments. You can consult our network directives by clicking here
If a story idea is percentage, send it here.