American shoppers love a bargain, but Temu’s new tariffs are a deal-breaker.
The Chinese-owned discount shopping app has lost 58% of its daily U.S. users since March, Reuters reported this week, citing data from app analytics firm Sensor Tower. The sharp drop comes as higher tariffs on Chinese goods and the closure of a key trade loophole drive up prices and shipping costs.
The end of the so-called de minimis loophole, which had allowed cheap, direct-to-consumer shipments from China to enter the U.S. duty-free, went into effect in March. Since then, Temu’s daily active users in the U.S. have fallen from about 70 million to under 30 million.
“Trade policy changes, including the elimination of the de minimis exemption, have significantly impacted cross-border e-commerce platforms like Temu,” Dr. Paul Carter, CEO of Global Wireless Solutions, told Reuters.
Temu had relied on rock-bottom prices and free shipping to fuel its U.S. rise. But new tariffs and shipping fees are making that harder to maintain. Analysts say shoppers are feeling the difference.
“U.S. consumers came for the bargains,” Carter said. “If those bargains disappear, so does the traffic.”
The timing also coincides with rising U.S.-China trade tensions, with new tariffs on imports ranging from electric vehicles to steel.
For now, Temu’s future in the U.S. looks uncertain. The company has not commented publicly on the user declines, but analysts expect it will either have to adjust its business model or risk further shrinkage of its U.S. audience.