Amazon's Chinese Rival Temu Loses 58% Of US Users As End Of Tariff Loophole Hits Business Model

PDD Holdings is facing growing pressure as its Temu platform loses users due to recent U.S. trade policy changes that removed key cost advantages for Chinese e-commerce. Temu’s daily U.S. user base dropped 58% in May, according to Reuters. The decline came after the White House ended the “de minimis” rule on May 2, removing tariff-free status for low-value Chinese shipments. Temu cut its U.S. advertising spending and changed its fulfillment approach in response to the policy shift. It now features only items from U.S. warehouses, marking China-shipped products as “out of stock.” New tariffs impose 90% duties or $75 per item on Chinese imports, rising to $150 by June. While rival Shein has adapted, Temu continues to struggle. PDD shares are down 0.46% year to date.