Chinese e-commerce giants Temu and Shein have seen a sharp decline in U.S. sales over the past week after President Donald Trump announced the removal of tax exemptions for small parcels—a benefit that had previously favored these platforms, Bloomberg reported.
This change negatively impacts American consumers, who had flocked to these platforms for affordable products.
According to data from Bloomberg Second Measure, Shein’s U.S. sales plummeted 16-41% within just five days, starting from February 5. During the same period, Temu—a subsidiary of Pinduoduo—also experienced a sales decline of up to 32%.
While post-holiday spending declines are common, this drop abruptly ended the growth momentum both platforms had maintained from late January until February 9.
The downturn began just one day after Trump announced that imports under $800 from China would no longer be exempt from tariffs, directly affecting most orders on both platforms in the U.S. Even though the policy has not yet taken effect, consumers have already become cautious about potential additional costs.
Other factors such as seasonal fluctuations, market competition, and macroeconomic trends have also contributed to the decline in sales for Temu and Shein.
How Are Shein and Temu Adapting?
Both companies had leveraged the small parcel tax exemption to keep product prices low in the U.S. Now, they are making strategic adjustments to adapt to Trump’s new policy.
- Shein has urged major clothing suppliers in China to expand production in Vietnam to minimize the impact of the new tariffs.
- Temu has loosened control over its supply chain in China by adopting a “half-custody” model, granting suppliers greater autonomy in managing their products.
Broader Impact on Shipping and Prices
Trump’s new tariff policy on Chinese goods has also disrupted the shipping industry and led to rising costs in the past week.
Following the announcement of the de minimis rule repeal (which previously exempted small parcels from import taxes), the United States Postal Service (USPS) initially suspended shipments from China and Hong Kong. However, they reversed this decision in less than a day.
On February 8, Trump stated that the tax exemption repeal would be delayed until an efficient tax collection system is fully implemented.
According to Nomura, Shein and Temu shipped a total of $46 billion worth of small parcels to the U.S. last year. The new tax policy could significantly disrupt their business models and alter American consumer habits in the coming months.
