Following the expiration of a key US tariff exemption, Chinese e-commerce platform Temu announced a significant shift in its shipping model, now routing all American sales through US-based sellers. This strategic move aims to circumvent new tariffs imposed by the US government, which targeted Chinese imports to encourage domestic manufacturing. Although Temu claims its products are shipped from within the US, they are still primarily manufactured in China and stored in US warehouses to expedite delivery. The change has already caused disruptions, with many items going out of stock and prices rising, prompting consumer frustration. The situation highlights the challenges faced by Chinese e-commerce companies in adapting to changing US trade policies and maintaining their competitive pricing strategies.

Temu has adjusted its shipping model in response to the expiration of the de minimis exemption, which previously allowed the duty-free import of goods valued at $800 or less, benefiting Chinese e-commerce platforms.

The US government's imposition of tariffs on Chinese imports, aimed at encouraging domestic manufacturing, has prompted Temu to recruit US-based sellers to handle sales and fulfill orders locally.

Despite shipping from 'local warehouses,' Temu's products are still largely manufactured in China, having been bulk shipped to US warehouses to minimize shipping times.

The change in shipping strategy has led to numerous items going out of stock, with consumers noting unavailable products in their digital carts and additional fees for orders under $30.

Market dynamics have shifted, with Temu already raising prices due to increased operational costs, and customers expressing dissatisfaction on social media platforms.

The Biden administration had previously criticized the de minimis exemption, which Chinese companies exploited to dominate the US market with low-cost products, prompting this strategic shift.

Temu faces potential supply chain challenges, including product shortages, and may need to reorder, offer substitutes, or further increase prices to manage inventory levels effectively.