Temu and Shein are in a tricky spot — but it's mostly good news

Temu and Shein person conscionable recovered themselves successful a unusual spot successful the caller 90-day reprieve successful the commercialized warfare with China. President Trump has loosened the tariffs to 30% (down from 145%) arsenic portion of a program to unfastened the negotiations for a caller commercialized deal.

However, precocious tariffs stay connected tiny packages shipped straight from China — the benignant that Temu and Shein typically send.

Until precise recently, Temu and Shein benefited from the de minimis exception, a loophole that allowed for packages nether $800 successful worth to vessel without duty. Trump closed this loophole starting May 2. He besides implemented tariffs arsenic precocious arsenic 120% oregon a level interest of $100 per bundle (rising to $200 successful June). Those stay successful effect, contempt the 90-day deal, Axios reported Monday.

But Temu had a workaround strategy that saved customers from having to adhd connected monolithic other "import charges" connected orders. Temu had already been gathering up warehouses successful the US, which meant that immoderate items could vessel locally (and much quickly).

A fewer weeks ago, Temu changed its tract and app to show astir exclusively items that shipped from US warehouses — products that would debar those nasty other fees. At the time, Temu told Business Insider it besides planned to enactment connected recruiting much US-based sellers.

Of course, this was a impermanent solution: eventually, those US warehouses would request to get restocked, and the caller bulk shipments would beryllium taxable to Trump's 145% tariffs. When I wrote astir this past week, I said that Temu had a fewer options: displacement to focusing connected Europe oregon different markets, or vessel to the US from different countries.

But determination was besides 1 different viable option: hold it retired and anticipation a commercialized woody happens soon.

So here's wherever Temu and Shein are now: the tariffs for shipping straight to customers from China are inactive onerous. That's atrocious for them.

The bully quality is that if, alternatively of shipping direct, suppliers vessel large quantities to the companies' US warehouses, the concern is better.

That's due to the fact that close now, Temu and Shein— which besides has US warehouses — have other clip to replenish those section warehouses with the little tariff charges. Temu, Shein, and the White House did not respond to requests for comment.

For Temu sellers, it isn't backmost to concern arsenic usual, but it is decidedly bully news. Here's what one seller told Bloomberg:

For Sun Yang, who owns a concern selling face- and body-painting tools specified arsenic brushes and colour palettes connected Temu’s online marketplace, the bully quality couldn’t travel soon capable arsenic helium watched his inventory dwindle astatine warehouses successful the US, which accounts for each of his sales.“Our full bureau was shouting ‘hooray!’ erstwhile we work the news,” Sun said from his company’s office successful Shenzhen adjacent Hong Kong.Sun saw mid-double-digit income maturation successful the past 2 months arsenic American consumers hoarded products earlier prices skyrocketed.“Returning to 30% means we person nary unit from terms hikes successful the foreseeable future,” said Sun, “I anticipation consumers tin summation much assurance and travel backmost to store again.”

So what does this mean? Well, I tin decidedly accidental that, for now, this is large quality for those small girls who privation 30 dolls alternatively of conscionable two. Temu and Shein person gotten yet different life.