Temu makes desperate move to win back frugal customers | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Temu, a Chinese online marketplace that became popular for selling a wide variety of products priced between $1 and $50, has recently made some drastic decisions to dodge the negative impact of President Donald Trump’s tariffs.

Tariffs are taxes companies pay to import goods from overseas, and the extra cost is often passed down to consumers in the form of price increases.

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On April 2, Trump raised eyebrows when he put a 10% “baseline” tariff on all countries importing goods to the U.S., with roughly 60 countries seeing higher tariff rates.

However, on April 9, Trump changed his tune and enforced a 90-day pause on reciprocal tariffs on all countries (except China), decreasing them to a universal rate of 10%. He also surprisingly hiked tariffs on China to 145%.

Temu had warned customers of impending price increases.

Image source&colon; Raul Ariano/Bloomberg via Getty Images

Temu’s drastic change to prepare for tariffs backfires

In response to this bold move, Temu warned customers on its website last month that it will have to increase prices.

“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up,” said Temu on its website. “To keep offering the products you love without compromising on quality, we will be making (a) price adjustment starting April 25, 2025.”

Temu later saw a sharp decline in app downloads. Its app now ranks No. 101 on a list of the top free apps in the U.S. on the App Store after consistently making the top 10, according to data from market research firm Sensor Tower.

The online retailer also quietly decided to dramatically pull back its advertising on Google and Meta, which owns Instagram and Facebook.

Temu even started adding “import charges” of about 145% to items, which in some cases doubled the price of an order. This sparked backlash from shoppers, who grew frustrated with price increases.

“Items imported into the U.S. may be subject to import charges,” said Temu on its website. “These charges cover all customs-related processes and costs, including import fees paid to customs authorities on your behalf. The amount listed may not represent the actual amount paid to customs authorities.”

Temu makes a bold move to keep prices low after backlash

After facing outrage from consumers, Temu has decided to stop shipping products from China to sell directly to consumers in the U.S.

“All sales in the U.S. are now handled by locally based sellers, with orders fulfilled from within the country,” said Temu in a statement. “The move is designed to help local merchants reach more customers and grow their businesses.”

On Temu’s website, it also states that there will be no extra charges attached to items that are shipped from local warehouses.

More Tariffs:

“No import charges for all local warehouse items and no extra charges upon delivery,” said Temu on its website. “Items marked with the ‘Local Warehouse’ tag are shipped from within your country or region. This means you do not need to pay any import taxes or customs fees.”

The move from Temu comes after a trade rule called “de minimis” retired on May 2. This rule allowed goods from China that are less than $800 to enter the U.S. duty-free with minimal inspections.

In an executive order Trump signed on April 2, he claimed that China used the loophole to “hide illicit substances and conceal the true contents of shipments sent to the United States through deceptive shipping practices.”

Amid growing tensions between the U.S. and China, many consumers are already concerned about Trump’s tariffs causing higher prices on products made in China.

According to a recent survey from Omnisend, 56% of Americans are worried that tariffs will increase prices. Also, 29% of Americans said that if prices rose, they would immediately stop or make fewer purchases from sellers in China.