How does Temu respond to tariff threats?

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The latest threats to the Trump administration have increased insecurity over TEMU business model and other major groups of E -Commerce. The White House returned its initial closure in 2025 of a void allowing low -value parcels sent from China to enter the US with minimal fuss and without taxes. But the risk of a permanent movement lasts.

The public is divided on the resulting threat to the business. Lex and Ft column argued: “The Chinese online store does not need a tax question to be a major threat to retail sellers of bricks and mortar.”

However, for the economist, “many American customers have been willing to bypass the often versatile quality of shein products and TEMU because they are so cheap. This will change when adding other customs tariffs and tariffs, which in some cases will double prices for consumers. ”

Which estimate is most convincing? Temu is owned by PDD Holdings, a Chinese company. TEMU operates an online B2C platform that went directly to the US in September 2022. International expansion has been fast: by 2024, it was operating in almost 80 countries. Annual revenue was estimated at $ 50 billion, a triple increase in 2023.

Most business model descriptions of TEMU emphasize its ability to promote the lowest costs of work in China to make millions of home products available abroad. Temu sells products made by companies that do not have internationally recognized brands. As reports change, TEMU has been found to be prices up to 80 percent lower than Rival E -Commerce platforms and still offers free transport and returns.

The slowdown of growth in Chinese consumption has forced the country’s producers to watch other markets for their existing capacity, selling closer to marginal costs. TEMU is well placed to take advantage of this situation.

During 2024, long before President Trump’s latest movement, TEMU would receive signals from officials in Washington and Brussels that low -cost imports would undergo the most severe import regimes. Adverse policy movements are not limited to Western economies. Indonesia was an early movement, imposing restrictions on foreign e -commerce platforms in September 2023.

However, policy changes take time to be announced and rolling. Sometimes trade policy changes do not occur at all and, even if they act, restrictive measures can be returned after a reaction from those damaged clients. Tens of millions of Americans and Europeans use the TEMU app.

Practical considerations also interfere. At the moment, US customs officials simply do not have the ability to process additional documents. These considerations are factorized as companies evaluate their exposure to further protectionism. Temu took into account in a series of quick answers:

• A postponement of international sales diversification to reduce US market addiction to less than half of global revenue

• Helping products sold in the US market by non-Kinish countries

• Offering to sell on its platform products of other companies, which bears responsibility for transporting their products to the US

• Setting up warehouses in the SH.BA and sending full containers from China, giving up exemptions of custom tasks

These movements highlight the varying degrees of freedom available to E -Commerce platforms that operate internationally. Trade tensions and trade wars tend to be bilateral or limited to a small number of countries. With more than 200 customs territories around the world, TEMU has many opportunities to reconfigure its commercial trail and its operations.

But are the movements described above enough to ensure the company continues to bloom? And what costs – clear and hidden – are included? Since competition is always relative, it should be taken into account at the relative strengths of other e-commerce platforms, for brick and mortar vendors and for companies that reach customers through a comprehensive strategy, which offers a smooth experience through the sites of the Internet, applications, social media and other channels.

Since E -Commerce business models have an “winning approach gets it all”, can TEMU have already grown as big as he can get protectionism in its effort?

Carlos Cordon is a professor of strategy and management of the IMD supply chain. Simon J. Emannett is a professor of geopolitics and strategy at IMD and co-chairman of the Global Council of the Future of the World Economic Forum for Trade and Investment.