In doing so, the Chinese e-commerce giant Temu has thrown down an audacious gauntlet. They’re changing their business model in response to the recent changes in U.S. tariff policy. The company is now focusing on products available in U.S. warehouses, effectively ceasing shipments from China to the United States. In 2018, then-President Donald Trump terminated the de minimis rule. Previously, this rule allowed for items worth $800 or less to be brought into the country tariff free.
Temu’s new target is a clear response to the new reality of trade. It hopes to minimize the economic harm of U.S. tariffs on its business. Temu likely hopes to centralize logistics to reduce costs. To accomplish this, it restricts its product listings to items that are stocked in American warehouses, skipping added fees associated with importing goods from China.
To support this shift, Temu has been aggressively courting sellers from the U.S. to establish a presence on its marketplace. This approach increases the range of offerings for the public. It’s a way to give local business more exposure in the national and global e-commerce marketplace. As such, Temu’s marketplace is quickly becoming filled with more domestically-sourced goods.
Temu has since issued some clarifying statements about its dramatic new operating model. It not only backdated or delayed products shipped from China as out-of-stock. This strategic decision further emphasizes the company’s commitment toward ensuring its collaborative and connected technology decouples with existing U.S. regulations and with consumer preference.
This pivot, while daunting, is a welcome response to the quickly changing regulatory environment that affects all aspects of international trade. The removal of the de minimis rule in itself places economic strain on firms like Temu. Now, they need to look to other innovative ways to maintain their leading market position.
“Temu has been actively recruiting U.S. sellers to join the platform,” – Temu spokesperson
Temu seems to be addressing these pain points directly. It remains committed to providing American consumers with low prices and unparalleled selection while abiding by all U.S. trade laws. By prioritizing American producers, Temu can improve its logistics efficiency and keep delivering the best experience to Americans.
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