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Discount Chinese retail app Temu appears to be passing on nearly all of President Donald Trump’s new import taxes to U.S. consumers, more than doubling the cost of some products in a move that might add to concern about the inflationary impact of tariffs.
Fast-fashion giant Shein also raised U.S. prices of its products, with hikes of more than 300% for certain items.
Shein has major operations in Indiana. In summer 2022, the company opened its Midwest distribution hub just northwest of Indianapolis—a 659,000-square-foot center in Whitestown—and announced plans for a second, 550,000-square-foot warehouse on its Boone County campus. At the time, Shein said it expected to boost employment at the site from about 750 to 1,400 by the end of 2025.
Previously exempted from any levies under the so-called ‘de minimis’ rule, parcels priced up to $800 now face an ad-valorem tax—of 120% of a product’s value—or a per postal item fee of at least $100 starting May 2. PDD Holdings Inc.-owned Temu is requiring customers to pay those levies on top of the original cost of the goods.
A look at 14 shipped-from-China items on Temu’s bestsellers list showed taxes exceeded the value of the product. A $19.49 power strip, for instance, attracted $27.56 in import charges as of Monday, or 1.41 times the price of the product. However, there are no import surcharges on items that are already available in U.S. warehouses, keeping the prices of such goods generally stable.
Among the top 80 items on Temu’s recommended bestsellers, 66 items are marked to be shipped from local warehouses, according to data compiled by Bloomberg. Temu and rival Shein Group Ltd. previously said they would start adjusting prices one week ahead of the May 2 de minimis tariff exemption removal.
The higher costs illustrate the impact of the tariffs, and they risk changing how Americans shop while disrupting shipments from the likes of Temu and Shein. The increase is part of Trump’s wider strategy to force China to seek a trade deal that would narrow Washington’s trade deficit with Beijing.
Temu did not immediately respond to a request for comment.
Temu has been asking Chinese factories to ship their goods in bulk to American warehouses back in February in what it calls a “half-custody” framework where it only manages the online marketplace.
However, as inventory in the U.S. depletes over time, prices could eventually go up when factories replenish stocks if tariffs on Chinese imports remain elevated at 145%.
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This is good. Not because we need to make clothes here in the US but because fast fashion, regardless of where it is made, is a cultural and environmental travesty that should be disincentivized in any way possible.
I don’t agree that Trump Tariffs should be 120% or more, but I do agree that China was taking advantage of the de minimis rule by severely subsidizing overseas mailing costs.