Chinese e-commerce platform Temu has announced it will stop shipping goods directly from China to U.S. consumers. The move follows intensified scrutiny of the “de minimis” rule, a trade loophole that allowed duty-free imports under $800, which U.S. authorities now claim has been widely abused.
Temu Shifts to Local Fulfillment in the U.S.
Temu said that all sales in the United States are now managed by U.S.-based sellers, with goods shipped from within the country. The company has been actively recruiting domestic partners to replace direct cross-border shipments. This structural change is intended to help local merchants expand and comply with updated import regulations.
End of the De Minimis Era for Chinese Retailers
The decision coincides with the closure of the “de minimis” exemption, a decades-old U.S. policy allowing low-value imports to enter the country without paying duties or taxes. The rule, which covered over 90% of U.S. cargo entries, had become a cornerstone of Temu and rival Shein’s cost-saving strategy.
Critics, including both Trump and Biden administrations, argued the exemption hurt U.S. businesses and facilitated illegal imports such as synthetic opioids hidden in small packages.
Retailers Warn of Higher Prices as Tariffs Rise
With the loophole shut down, packages from China now face import taxes of up to 120%, or flat fees that will increase to $200 by June. Industry analysts predict this shift will drive up consumer prices. One estimate by the American Action Forum suggested eliminating the exemption could add $8 billion to $30 billion in annual costs for U.S. shoppers.
Temu and Shein previously warned of price adjustments due to rising global tariffs. Shein has not commented further on the policy changes.
International Ripple Effects and Regulatory Imitation
The United States isn’t alone in targeting low-value imports. The UK is reviewing its own rule that exempts imports under £135, and the European Union has proposed ending duty-free treatment for parcels below €150. These moves could similarly drive up prices for consumers in Europe.
In response to shifting rules, Chinese platforms may reconfigure logistics operations to focus more on regional warehousing and compliance with domestic trade laws.
Will Trade Enforcement Improve—or Burden Borders?
U.S. officials say stricter control is necessary to combat illegal drugs, but critics argue the rule change may strain already stretched border agents. According to the National Foreign Trade Council, ending de minimis could divert customs resources away from the southern border, where most illicit substances enter.
As enforcement ramps up, the question remains: will closing this trade loophole truly protect American interests—or simply shift the burden?
