Temu pushes ‘local’ products after Trump reverses trade loophole that helps Chinese companies avoid taxes
Temu is touting more of its so-called “local” products after President Trump revoked a lucrative trade loophole that helped the Chinese fast-fashion firm avoid taxes and US customs.
On Thursday, the Chinese-owned e-commerce site promoted items that had a green “local” badge, meaning they come from a US warehouse – boasting of deals starting as low as $1.99 with ultra-fast shipping.
The bulk of its “Lightning deals” section included these “local” items, and the website’s homepage promoted a special “local warehouse” section.
Temu is trying to pivot from its reliance on Chinese merchants who ship direct to the US after President Trump imposed a 10% tariff on China, and killed the longtime “de minimis” exemption, which allowed sellers to ship packages worth less than $800 into the US duty-free.
The loophole helped Temu and fellow Chinese fast-fashion giant Shein grow massively popular in the US, since they could ship products directly from China to US doorsteps and sell them at dirt-cheap prices — like $5 sneakers and $13 AirPod knockoffs.
Trump’s tariff and elimination of the de minimis rule could force the Chinese firms to raise their prices and face major shipping delays at customs, experts previously told The Post.
So the Chinese-owned firm has ramped up its promotion of sellers with inventory in US warehouses in an attempt to avoid the taxes and customs craze, CNBC earlier reported.
Temu did not immediately respond to a request for comment.
Along with getting purchases to US shoppers quicker, the strategic move will also help reduce the company’s dependence on sellers who ship direct from China, according to CNBC.
Though the “local” products are stored in US warehouses, many of them are sold by businesses based in China, according to the product listings.
By prioritizing its “local” products, Temu sets itself up to more directly compete with US rivals like Amazon, eBay and Walmart, which partner with Chinese sellers who ship goods to US warehouses.
These more traditional retailers have taken notice of Temu and Shein, who emerged as stiff competition over the past few years, especially as the Chinese firms took advantage of TikTok trends and churned out new products quickly.
Amazon last year launched its own low-price storefront, Haul, to compete with the two fast-fashion sites.
Meanwhile, in March, Temu started onboarding sellers with inventory in US warehouses in a preemptive measure as US lawmakers fought to stifle the Chinese firm’s imports, according to CNBC.
US lawmakers have accused Temu and Shein of abusing the de minimis rule.
Their exports soared to $66 billion in 2023, from $5.3 billion in 2018, according to a report released last week by the Congressional Research Service.
And a 2023 investigation by the House select committee found that Temu was likely shipping goods made with forced labor into the US on a “regular basis.”
By July 2024, about 20% of Temu’s US sales came from sellers with US warehouses, not merchants based in China, according to e-commerce market research firm Marketplace Pulse.
Shein has also been bringing on US buyers and sellers, as well as opening distribution centers in Illinois and California and a supply chain hub in Seattle.
As Temu and Shein this week feared extra costs and shipping delays after the de minimis rollback, they were thrown another curveball when the United States Postal Service announced a ban on inbound packages from China and Hong Kong, and then reversed the suspension less than a day later.
