How Amazon Rival Temu Got Sucked Into Trump’s Trade War
Feb 18, 2025
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In this engaging discussion, Spencer Soper, a seasoned Bloomberg journalist with extensive expertise in e-commerce, dives into the rise of Temu as a major competitor to Amazon. He outlines how Temu has leveraged tariff loopholes to offer rock-bottom prices, drawing in budget-conscious consumers. The conversation also unpacks the ramifications of recent trade policy changes on Temu and similar platforms, highlighting the potential fallout for American shoppers as competition and pricing dynamics shift amidst evolving regulations.
Temu's rapid rise in the U.S. e-commerce market is driven by ultra-low prices enabled by the de minimis rule allowing duty-free imports under $800.
The potential revocation of the de minimis rule poses significant threats to Chinese e-commerce platforms, leading to possible increases in prices and reduced consumer options.
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Temu's Rapid Rise in E-Commerce
Temu has quickly become a major player in the U.S. e-commerce market, recently surpassing Amazon to become the second-largest online shopping platform. A key factor contributing to its success is its competitive pricing, primarily facilitated by the de minimis rule, allowing it to import goods valued under $800 duty-free. This strategy has enabled Temu to offer products at significantly lower prices than many competitors. With 50 million active monthly users and substantial annual sales projections, Temu has tapped into a growing demand for bargain shopping, particularly amid economic challenges.
Impact of the De Minimis Rule Changes
The potential revocation of the de minimis rule poses serious ramifications for Chinese e-commerce platforms, particularly Temu and Shein, as it could lead to increased costs and reduced consumer demand. Under the current system, these platforms have thrived on their ability to circumvent tariffs, but if the loophole closes, they may face disruption or even closure due to their reliance on low-cost imports. This shift could result in higher prices and fewer options for American consumers who have enjoyed the benefits of cheap online shopping. The uncertainty surrounding this change has left many stakeholders, including retailers and consumers, grappling with how the new regulations will affect the market landscape.
Since its US launch in 2022, Chinese marketplace Temu has rapidly risen to become America’s biggest e-commerce platform after Amazon, thanks to ultra-low prices on almost every product imaginable.
On today’s Big Take Asia Podcast, host K. Oanh Ha speaks to Bloomberg’s Spencer Soper and Rachel Chang about Donald Trump’s order to close a tariff loophole and what it means for American shoppers and the giants supplying them with goods direct from China.