Shein and Temu see U.S. demand plunge on ‘de minimis’ trade loophole closure

Use of low-cost e-commerce giants Temu and Shein has slowed importantly successful the cardinal U.S. marketplace amid President Donald Trump’s tariffs connected Chinese imports and the closure of the de minimis loophole, caller information shows.

Temu’s U.S. regular progressive users (DAUs) dropped 52% successful May versus March, earlier Trump’s tariffs were announced, portion those astatine rival Shein were down 25%, according to information shared with CNBC by marketplace quality steadfast Sensor Tower.

DAUs is simply a measurement of the fig of radical who sojourn oregon interact with a level each 24 hours. Monthly progressive users (MAUs), a measurement of idiosyncratic engagement implicit a 30-day period, was besides down astatine Temu (30%) and Shein (12%) successful May versus March.

The declines were besides reflected successful some platforms’ Apple App Store rankings. Temu averaged a fertile of 132 successful May 2025, down from an mean apical 3 ranking a twelvemonth ago, portion Shein averaged a fertile of 60 past period versus a apical 10 ranking the twelvemonth prior, the information showed.

Neither Temu nor Shein instantly responded to CNBC’s petition for comment.

The idiosyncratic dropoff comes arsenic some Temu and Shein person pulled backmost connected U.S. advertizing walk implicit caller months since the Trump administration’s tariff announcements.

Trump successful April announced sweeping tariffs connected Chinese imports, including the end of the “de minimis” tariff exemption connected May 2, which allowed companies to vessel low-cost goods worthy little than $800 to the U.S. tariff-free.

In May, Temu’s U.S. advertisement walk fell 95% year-on-year portion Shein’s was down 70%.

“Temu and Shein’s diminution successful U.S. advertisement walk was besides noticeable successful April, arsenic walk decreased by 40% and 65% YoY, respectively,” Seema Shah, vice president of probe and insights astatine Sensor Tower, said successful emailed comments to CNBC.

Both Temu and Shein besides altered their logistics models successful the aftermath of tariffs, shifting distant from a driblet shipping model, which allowed them to nonstop items straight from Chinese suppliers to U.S. consumers, and instead, peculiarly successful Temu’s case, gathering up a web of U.S. warehouses.

Rui Ma, laminitis and expert astatine Tech Buzz China, said specified moves were besides apt to person impacted the companies’ advertisement walk strategy and lawsuit acquisition patterns.

“All these further costs and regulatory hurdles are intelligibly hurting Chinese platforms’ U.S. maturation prospects,” she wrote successful emailed comments.

Tech Buzz China probe from March showed that a 50% tariff would beryllium the constituent astatine which Temu would suffer astir of its terms advantages and find it hard to operate. The tariff connected erstwhile de minimis imports presently stands astatine 54%, having been lowered from 120% amid a 90-day tariff truce betwixt the U.S. and China.

Growth extracurricular the U.S.

Last week, Temu’s genitor institution PDD Holdings reported first-quarter earnings beneath estimates and pointed to tariffs arsenic a important unit connected sellers.

Temu’s popularity has nevertheless picked up extracurricular the U.S., with non-U.S. users rising to relationship for 90% of the platform’s 405 cardinal planetary MAUs successful the 2nd quarter, according to HSBC.

Writing successful a enactment past week, HSBC analysts said that was “supported by maturation successful Europe, Latin America, and South America.” They added that the swiftest of that maturation occurred successful “less affluent markets.”

“Many (Chinese platforms) are present actively redirecting their efforts toward different markets specified arsenic Europe,” Ma said.