Temu, the fast-growing Chinese online retailer known for ultra-discounted merchandise, has abruptly changed its business model in the United States after the Trump administration eliminated a key trade provision that allowed the platform to ship goods directly from China without paying import duties.
The company has shifted its website and app to only display products shipped from U.S.-based warehouses, with items previously shipped directly from China now labeled as out of stock. The change comes as the so-called “de minimis” rule expired Friday at 12:01 a.m. EDT, following an executive order signed by President Donald Trump in April.
A Temu spokesperson confirmed that all sales in the U.S. are now handled by local sellers and fulfilled “from within the country,” emphasizing that pricing for U.S. shoppers “remains unchanged.”
“Temu has been actively recruiting U.S. sellers to join the platform,” the spokesperson said. “The move is designed to help local merchants reach more customers and grow their businesses.”
The de minimis provision, which has been in place since 2016, allowed packages valued at $800 or less to enter the United States duty-free. According to an NPR report, about 40% of the roughly 1.4 billion small packages sent directly to American consumers annually come from China and Hong Kong.
Earlier this week, as the deadline approached, Temu had imposed “import charges” ranging from 130% to 150% on products shipped directly from China. These fees often exceeded the cost of the individual items themselves, more than doubling the price of many orders.
This radical shift in operations represents the culmination of preparations Temu has been making over the past year. The company had gradually built up inventory in U.S. warehouses in anticipation of escalating trade tensions and the removal of the de minimis exemption.
Other retailers that relied heavily on the tariff exemption are also adapting their strategies. Shein, another popular Chinese e-commerce platform, recently moved to raise prices. The fast-fashion retailer added a banner at checkout informing customers that “Tariffs are included in the price you pay. You’ll never have to pay extra at delivery.”
The Trump administration’s move to end the de minimis exemption has received bipartisan support. Last year, 126 House Democrats sent a letter to then-President Joe Biden urging him to use an executive order to apply inspections and duty fees to all direct shipments.
Critics of the de minimis exemption argue it has hurt U.S. businesses, such as fashion retailer Forever 21, which recently began liquidating its U.S. stores after partly attributing the rise of Shein and Temu to its downfall.
Kimberly Glas, president of the National Council of Textile Organizations, a trade group that lobbied for the end of de minimis shipments to protect U.S.-based manufacturers, praised the change. “We are really pleased,” she said. “We think this was a huge step forward.”
However, a study published last year by the National Bureau of Economic Research concluded that American consumers will end up paying $10.9 billion to $13 billion more for purchases each year as a result of ending the exemption. The study also found that “lower-income consumers take advantage of de minimis shipments disproportionally more than richer consumers.”
Prior to Trump’s second term in office, the Biden administration had also explored ways to curtail the provision. Beyond economic concerns, critics have argued that the de minimis rule facilitates shipments of fentanyl and other illicit substances by reducing the likelihood of customs inspections.
With this latest development, Temu’s business transformation highlights the far-reaching impact of trade policies on global commerce and how rapidly companies must adapt to new regulatory environments. The move also signals a potential shift in the landscape of discount online retail in the United States as companies navigate higher costs and changing consumer expectations.
