As America apparently digs in for the long haul in a trade war with China, one of the most popular places on the web for cheap consumer goods is increasing its prices. With import taxes skyrocketing for US residents and the de minimus exemption set to disappear, Temu has raised prices on most of its items. Prices appear to have more than doubled for most items originating from China.
De minimis exceptions are a rule that allows items imported to the US with a declared value of under $800 to be exempt from import taxes. This is what enables popular China-based marketplaces like Temu, Shein, and AliExpress to offer items at prices far lower than even companies like Amazon or Walmart. Though de minimis (literally “with trifles” in Latin) is a policy designed to avoid overincumbering taxation and customs on items that would be more expensive to track than the tax actually collected, US president Trump has declared an end to the de minimis exemptions in addition to incredibly onerous taxes on imports from China. De minimus is scheduled to be suspended on May 2nd, subjecting most items to the same 145 percent import taxes as other Chinese goods.
“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up,” says a message on Temu’s website. “To keep offering the product you love without compromising on quality, we will be making price adjustments starting April 25, 2025.”
While the 145 percent tax rate does not automatically mean that, say, a $10 T-shirt costs $24.50, that’s generally how it plays out as both suppliers and retailers pass the cost on to consumers. CNBC observes prices on many items roughly equivalent to the tariff rate, more than doubling, and thus making Temu a far less enticing option than some of its US-based competitors.
Not that simply buying from another site will help much. With a huge amount of goods sold to Americans still originating from China, including everything from clothing to food to electronics to car parts, experts are predicting widespread price increases and the obvious hammer-blow to Americans’ buying power. Consumers aren’t the only ones affected, as US-based companies reliant upon Chinese imports for their goods are already facing massively increased operating costs. Many have stopped offering sales to Americans. Some smaller companies, including PC manufacturers, are facing an existential crisis if tariffs on Chinese goods continue for an extended period of time.
Some goods sold on Temu ship from US-based suppliers and are not immediately subject to import tariffs, labelled with a “local” tag. But since most of these items appear to be merely held in US warehouses in anticipation of being ordered, it seems probably that these prices will also rise once domestic supply runs out and new goods from China are imported.