Products shipped by Temu originate exclusively from the United States, though that does not necessarily imply they are manufactured within the country.
Changing Tides for Temu:
After the expiration of a key US tariff exemption, Chinese e-commerce platform Temu announced a radical shift in its shipping strategy, routing all American sales through domestic sellers.
"All US sales are now processed by local sellers, with orders fulfilled domestically," a Temu spokesperson stated. The platform has been actively recruiting US vendors to join its ranks.
This transformation marks a significant departure for Temu, as well as other e-commerce sites like Shein and AliExpress, which utilized the $800 de minimis exemption to flood the US market with budget-friendly goods. Although President Trump aims to stimulate domestic manufacturing with his new tariffs, Temu's move demonstrates how major corporations can circumvent this objective by adopting alternative tactics.
The de minimis corridor allowed duty-free importation of goods valued under $800, often bypassing time-consuming inspections and paperwork. Chinese e-commerce sites capitalized on this exemption, flooding the US market with inexpensive merchandise. However, Trump's imposition of tariffs on all Chinese imports could render these low-cost items less affordable for the millions of Americans who have grown reliant on them.
Most Shein and Temu products are manufactured in China and shipped directly to the US, contributing to their affordability. However, Temu's new business jargon may appeal to Trump, but it's essential to remember that products shipped from "local warehouses" do not necessarily hail from American factories.
Sites such as Temu and Shein have been expanding their US warehouse networks for years to expedite shipping. Last year, the Biden administration began voicing concerns about the de minimis exemption, prompting Chinese shippers to stockpile goods and bulk-ship them to US warehouses. In February, Bloomberg reported that Temu initiated a supply chain overhaul, instructing supplier factories to send merchandise in bulk to US warehouses. When these items run out, it's unclear if they will be replaced by tariff-exempted stock or goods subject to Trump's imposed tariffs on China.
For now, foreign-produced products are being delivered to American doorsteps via US distributors. Temu does not disclose its supplier partners publicly. Tang, a supply chain management professor at the University of California, Los Angeles, stated that if shortages arise, Temu has few options. They could re-order items at increased costs, offer substitute recommendations, or raise prices.
Temu implemented price hikes last week. According to users on Reddit, a sizeable portion of items on the platform are unavailable, and an additional fee is required for orders below $30. One user expressed disappointment, stating, "Temu is gone! What I saw today completely convinced me!"
CNN's Elisabeth Buchwald contributed to this report.
- Though President Trump's aim was to stimulate domestic manufacturing through tariffs, Temu's strategy of routing all American sales through domestic sellers suggests a means for major corporations to circumvent this objective.
- Despite the new tariffs, foreign-produced products are being delivered to American doorsteps via US distributors, as seen in Temu's case, but it's important to note that products shipped from "local warehouses" are not necessarily sourced from American factories.
- In response to potential shortages, Temu may re-order items at increased costs, offer substitute recommendations, or raise prices, as they did with recent price hikes on the platform.
- Temu's lack of transparency regarding supplier partners could make it challenging to determine if the unavailability of certain items on the platform is due to the increased costs of imported goods subject to Trump's tariffs or a result of the company's new business strategy.
