China’s E-Commerce Giants Adjust Prices and Rethink Delivery Models as U.S. Tariffs on Low-Value Parcels Bite
By Bao Yunhong and Denise Jia
The sweeping U.S. tariff policy targeting low-value parcels from China has upended cross-border e-commerce operations, forcing platforms such as Temu and Shein to pull fully managed listings and scramble to rework their logistics strategies.
PDD Holdings Inc.’s Temu, a pioneer of the full-consignment model — where goods are shipped directly from China to American buyers — now lists only “local warehouse” or semi-managed products on its site and app. Fully managed items are marked “out of stock,” and one Temu seller told Caixin their U.S. storefront was automatically suspended by the platform.
The disruption follows Donald Trump’s presidential order, signed on April 9, imposing harsh tariffs on small parcels from the Chinese mainland and Hong Kong. The directive mandates either a 120% ad valorem duty or a $100 flat fee per package, with the latter set to double to $200 from June 1.
U.S. Customs and Border Protection canceled the longstanding “de minimis” exemption for packages under $800 from China and Hong Kong from May 2, a change that blocks duty-free entry and complicates customs clearance for countless orders.
Temu and Shein began adjusting prices on April 25 to absorb the impact, Bloomberg data shows. Health and beauty products saw the steepest increases, with top sellers jumping 51% on average overnight and some doubling in price. The price of a kitchen towel set rose 377%, while toys and home goods climbed more than 30%. Price increases for women’s fashion were more modest at around 8%.
In response, Temu reassured customers that goods shipped from U.S. warehouses remain duty-free and ship without added fees. Shein similarly updated its checkout page to state, “Duties are included in the price — no additional fees at delivery.”
Meanwhile, Amazon briefly considered displaying tariff surcharges on its Amazon Haul discount listings but quickly reversed course after Karoline Leavitt, the White House press secretary, described the move as “hostile political act.”
As tariffs bite, both Temu and Shein are urging merchants to switch to semi-managed logistics models. Temu has introduced a “one-click migration” feature to help sellers move existing inventory. Shein is offering similar tools and support to help full-consignment vendors set up local storefronts.
Still, not all sellers are on board. One factory-based Temu vendor told Caixin that semi-managed logistics require new inventory and costly warehousing abroad, while eroding merchants’ pricing power. “We might as well sell on Amazon,” the seller told Caixin.
To ease the change, Temu recently rolled out a new “Y2” model allowing sellers to ship goods only after customer orders are placed. Products are flown to the United States, cleared through customs and then delivered from a domestic transfer warehouse — all within 14 business days. Temu promises preferential traffic for these listings.
The model hasn’t convinced everyone, however. Some sellers say high tariffs and shipping costs wipe out any competitive edge, while concerns linger about delivery reliability and unclear penalties for delays. “The costs are too high, and we still have to pay duties,” one multi-platform merchant said. “At this point, it’s just not worth it.”
Contact reporter Denise Jia (huijuanjia@caixin.com)
caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.
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