• President Trump lowered the tariffs on goods from China to 30%.
• Packages under $800 shipped directly to customers from China are still subject to high duties.
• But Temu has already started shifting to shipping from US warehouses — so this is still a win for the company.

Temu and Shein have just found themselves in a strange spot in the new 90-day reprieve in the trade war with China. President Trump has loosened the tariffs to 30% (down from 145%) as part of a plan to open the negotiations for a new trade deal.

However, high tariffs remain on small packages shipped directly from China — the kind that Temu and Shein typically send.

Until very recently, Temu and Shein benefited from the de minimis exception, a loophole that allowed for packages under $800 in value to ship without duty. Trump closed this loophole starting May 2. He also implemented tariffs as high as 120% or a flat fee of $100 per package (rising to $200 in June). Those remain in effect, despite the 90-day deal, Axios reported Monday.

But Temu had a workaround strategy that saved customers from having to add on massive extra "import charges" on orders. Temu had already been building up warehouses in the US, which meant that some items could ship locally (and more quickly).

A few weeks ago, Temu changed its site and app to display almost exclusively items that shipped from US warehouses — products that would avoid those nasty extra fees. At the time, Temu told Business Insider it also planned to work on recruiting more US-based sellers.

Of course, this was a temporary solution: eventually, those US warehouses would need to get restocked, and the new bulk shipments would be subject to Trump's 145% tariffs. When I wrote about this last week, I said that Temu had a few options: shift to focusing on Europe or other markets, or ship to the US from other countries.

But there was also one other viable option: wait it out and hope a trade deal happens soon.

So here's where Temu and Shein are now: the tariffs for shipping directly to customers from China are still onerous. That's bad for them.

The good news is that if, instead of shipping direct, suppliers ship big quantities to the companies' US warehouses, the situation is better.

That's because right now, Temu and Shein— which also has US warehouses — have extra time to replenish those local warehouses with the lower tariff charges. Temu, Shein, and the White House did not respond to requests for comment.

For Temu sellers, it isn't back to business as usual, but it is definitely good news. Here's what one seller told Bloomberg:

For Sun Yang, who owns a business selling face- and body-painting tools such as brushes and color palettes on Temu’s online marketplace, the good news couldn’t come soon enough as he watched his inventory dwindle at warehouses in the US, which accounts for all of his sales.

“Our whole office was shouting ‘hooray!’ when we read the news,” Sun said from his company’s headquarters in Shenzhen near Hong Kong.

Sun saw mid-double-digit sales growth in the past two months as American consumers hoarded products before prices skyrocketed.

“Returning to 30% means we have no pressure from price hikes in the foreseeable future,” said Sun, “I hope consumers can gain more confidence and come back to shop again.”

So what does this mean? Well, I can definitely say that, for now, this is great news for those little girls who want 30 dolls instead of just two. Temu and Shein have gotten yet another life.

• I love Temu, and so far, it's weathering the Trump tariff wars.
• I got my latest order just fine — with no extra fees — because Temu is shipping from US warehouses.
• But eventually, those warehouses are going to be empty. Then what happens? I asked experts.

If you haven't been following my Temu saga, let me catch you up: I (reluctantly, and with appropriate shame) love Temu! I was nervous after President Donald Trump ended the loophole that lets it ship me cheap junk from China. But then I got my latest order — with no problems, delays, or extra fees.

So does that mean my Temu habit is safe?

I talked to a couple of experts on world trade. They told me: Temu is probably safe for now, but over the long term, my relationship with Temu could come to a sad and screeching halt.

That's because right now, Temu is shipping everything that US customers buy from US warehouses. That means those orders — like my one last week for some children's birthday party favors — avoided the extra fees Trump slapped on orders coming from China.

But pretty soon, those US warehouses are going to run out of stuff. Then what happens? The experts I talked to said that's where things get tricky. Here are some potential outcomes:

• The US and China hammer out a trade agreement that lowers or ends tariffs, and Trump backpedals on his closing of the so-called de minimis loophole that allowed Temu — and Shein — to send stuff to the US directly from Chinese warehouses with no extra duties.
• Temu recruits companies to start storing millions of items in US warehouses to replenish the ones that will soon be empty.
• Temu somehow gets companies to make low-cost crap in countries aside from China that aren't subject to as high of tariffs. (So that squirt gun that used to be made outside Beijing might now be made outside Hanoi, Vietnam.)

Any of those things would be a huge change from how Temu does business now. It's a marketplace where sellers in China have warehouses full of stuff, and Temu is just the intermediary, acting as a showroom for those wares to American customers. After US customers fill up their baskets, the sellers send orders directly from their warehouses to the US — exploiting the de minimis loophole that eliminates duties for packages sent directly to customers that have a value under $800. (That's the loophole Trump closed.)

So getting a whole new army of sellers, this time in the US, would be a big lift. A Temu spokesperson said that's exactly what the company is doing — "actively recruiting US sellers to join the platform."

"The move is designed to help local merchants reach more customers and grow their businesses," the spokesperson told Business Insider. It's not clear how the sellers would source the items they would sell. If they were made in China and imported for sale in the US, presumably, the seller would still have to pay a tariff — even if the end customer avoided the de minimis fee.

And besides, I'm not sure US-based sellers would be able to offer the same ultralow prices that Chinese sellers do. (If they can't, shoppers like me might just head to Amazon.)

Temu will eventually run out of stuff in the US

Willy C. Shih, a professor at Harvard Business School who focuses on global supply chains and manufacturing, estimated that Temu might have enough stock to last through the summer, or a little beyond. "I've talked to some people who have enough inventory to last until the holiday season," he said. "But then, eventually, they have to replenish."

Yannis Bakos, an assistant professor at NYU's Stern School of Business who focuses on e-commerce, said Temu and Shein would eventually run out of runway — if tariffs didn't change.

"While some strategies may offer short-term relief, the long-term sustainability of their US operations is questionable if the tariffs remain," Bakos said. "If they try to increase prices and move upmarket, it would be hard for them to compete with Amazon, so their likely best option would be to focus on increasing their growth into other markets, such as Europe."

Already, Temu and Shein in April sharply boosted their advertising in Europe, Reuters reported. It said local downloads there of the ultracheap shopping apps had risen but that growth was slow.

Is this Temu's new normal?

Still, Shih speculated there's one last tactic for Temu — and for those who love it, like me: Wait it out.

Eventually, the US and China will likely make some sort of trade deal, and the blisteringly high tariffs may ease up. Will this happen anytime soon? It could be a risky move putting too much hope into this basket after Trump said little girls might need to live with just two dolls instead of 30 this Christmas.

After all, he might actually believe Americans need to break their culture of consumption. (How much you take that at face value is up to you.)

As for me? I got my latest Temu order cheap and quick. And what is more American than being satisfied with "I got mine?" What happens next time … I'm not sure.

• Temu is ceasing direct Chinese exports to the US, shifting to a local fulfillment model.
• The change follows the closure of a trade loophole allowing duty-free imports under $800.
• Higher prices are expected as import taxes may now apply to previously exempt goods.

The era of ultra-cheap goods shipped directly from China via Temu is coming to an end.

The e-commerce giant, which added "import charges" to customers' orders at the end of April, announced a dramatic overhaul of its US business model.

Temu is ceasing direct-from-China shipments in response to the federal government closing a long-standing trade loophole.

The "de minimis" exemption allowed packages valued under $800 to enter the US duty-free, a critical advantage Temu and competitor Shein exploited to offer cheap prices.

The exemption, born from a 1938 law meant to simplify customs, became a linchpin of modern e-commerce logistics. Its $800 threshold fueled an explosion of small packages flooding US ports, accounting for the vast majority of import entries, according to CBP data.

Washington moved to close the loophole under the Trump administration, with the two-pronged goal of cracking down on illicit shipments like fentanyl smuggled in small packages and creating fairer competition for American retailers burdened by tariffs bypassed by foreign shippers.

Similar concerns about the rule's exploitation were previously flagged by the Biden administration.

In a statement shared with Business Insider, the company said: "Temu's pricing for US consumers remains unchanged as the platform transitions to a local fulfilment model. All sales in the US are now handled by locally based sellers, with orders fulfilled from within the country.

"The move is designed to help local merchants reach more customers and grow their businesses. This shift is part of Temu's ongoing adjustments to improve service levels."

The impact on consumers is expected to be direct: higher prices.

Goods once exempt could now be hit with hefty import taxes or fees, potentially starting at $100 or based on percentages exceeding 100% of the value. Policy watchers have consistently warned that these new costs would likely be passed on to shoppers.

Besides the cost, officials said the huge number of these packages overwhelmed customs workers and strained inspection resources.

The UK and EU are both considering similar policy shifts, which could prompt a hike in prices in Europe soon.

• Temu is now adding a hefty "import fee" to orders that ship from China. It's often more than the orders themselves.
• But Temu also has tons of "local warehouse" items already in the US that avoid the fees.
• The site is surfacing these local items in search and recommendations.

When I placed a Temu order last month, I thought it would be my last hurrah — a final order before new fees and tariffs took hold. But it turns out, Temu has local warehouses in the US — and I was able to order again on Tuesday with no extra fees.

I made my last order on the day President Donald Trump announced his plans to close the "de minimis" loophole that allowed Temu and Shein to ship to the US without paying duty fees. I also got in under the wire before significant tariffs for Chinese-made goods hit.

I waited with baited breath to see if my order — some cheap battery-powered bubble wands — would arrive safely and without any extra duty fees (it did).

Since then, starting earlier this week, Temu has started adding a line item at checkout for an "import charge" in addition to shipping or the cost of merchandise on some orders.

When I checked on Tuesday — looking at some items I had left in my cart last month but didn't buy — the import fee was higher than the total cost of the merchandise. Basically, it made my Temu haul a terrible deal — higher overall costs than buying similar items at a regular store.

I thought this would mean curtains for Temu, the death knell. No one would be willing to pay these exorbitant extra fees — only someone who accidentally didn't notice it at checkout might (and then get really mad later).

But it turns out that's not exactly what's happening. Temu has 4D chess'd Trump's tariffs in a way.

For a while now, Temu and Shein have been setting up local warehouses in the US. Previously, these were an option that would be flagged to shoppers as offering faster shipping.

Stuff that is shipping within the US doesn't need to take on that extra "import fee" — that's only for packages shipping from China.

Presumably, the stuff in the local warehouses has already been in the country for a while, so for now, it isn't affected by the other tariffs for goods made in China that will eventually be shipped here.

Temu is very aggressively prioritizing the "local warehouse" items on its app and website. (Temu didn't immediately respond to a request for comment on its strategy.)

When you search for an item — I was looking for decorations and party favors for my daughter's birthday — the top results (in fact, the entire page of results) are all from local warehouses. On product category pages for home goods, toys, and women's clothing, all the results for at least two pages were local warehouse items.

In fact, it was actually hard to browse for something that wasn't shipped locally.

Basically, Temu has very quickly shifted its entire storefront for US customers to show them almost exclusively local results — the kinds of items that don't require import fees.

It's hard to tell whether the actual prices on those might be slightly higher than before things changed with Trump's new policies. Temu is a marketplace with lots of sellers, so often, you might find items that look nearly identical selling at slightly different prices. The bubble toy I ordered in March cost $4.22 but is no longer available from that seller; a similar version shipping locally is listed at  $7.61. (For comparison, Amazon sells a two-pack of the toy for around $16.)

What does this mean for shopping from Temu?

For the short term, Temu customers will mostly avoid getting slammed with massive fees, it appears. But long-term, I'd guess prices will probably go up — those local warehouses will need to restock with merchandise from China, which will be subject to tariffs.

Still, Temu's competitors for cheap household goods, toys, and apparel will also be feeling that same squeeze from tariffs. And by then? Who knows what will happen? Maybe my love affair with Temu isn't over after all.

This morning, Punchbowl News reported that Amazon was considering listing the cost of tariffs as a separate line item on its site, citing "a person familiar with the plan." Amazon later acknowledged that there had been internal discussions to that effect but only for its import-focused Amazon Haul sub-store and that the company didn't plan to actually list tariff prices for any items.

"This was never approved and is not going to happen," reads Amazon's two-sentence statement.

Amazon issued such a specific and forceful on-the-record denial in part because it had drawn the ire of the Trump administration. In a press briefing early this morning, White House Press Secretary Karoline Leavitt was asked a question about the report, which the administration responded to as though Amazon had made a formal announcement about the policy.

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• I've been tracking my latest order from Temu. It finally arrived — with no extra fees.
• But starting soon, because of the expected ending of a shipping loophole, there may be new fees.
• Temu and Shein have said they're raising prices.

Sure, the national hardship of price increases tied to tariffs is only getting started. But my personal journey of stressing about a recent Temu order? Phew, that's done! Our nation can breathe a sigh of relief.

To catch you up on my harrowing personal drama: The night before "Liberation Day," I placed a farewell order from Temu, the e-commerce marketplace that ships orders (mostly) directly from China.

Aside from enacting tariffs, Donald Trump has also said he would end the de minimis loophole that has allowed Temu, Shein, and others to ship orders with values under $800 directly from China to customers in the US without paying duty fees. That loophole has been the underpinning of Temu and Shein's astonishingly low prices on clothing and knickknacks.

The details about closing the de minimis rule have been a little unclear at times — not unlike the back-and-forth with Trump's tariffs. Initially, it was unclear when the yanking of the de minimis exception would go into effect, and I worried that when my order arrived, I might get slapped with a hefty $75 fee.

Now it seems that the de minimis loophole closes on May 2, which means that a few last shipments — including my own — have been able to sneak in under the wire.

I got three bubble machine/bubble wand items.

Temu and Shein have both put up statements on their websites addressing customers to warn them that price increases will hit soon.

What's kind of odd is that both sites, which are owned by different parent companies, had the same message, worded exactly the same — only the company name at the end is different. (Temu and Shein didn't comment.)

The statements say:

Dear Customers,

Thank you for your continued support. Since we began serving U.S. shoppers, our goal has been simple: to offer great product/fashion at affordable prices while creating positive impact in the communities we serve.

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

Until April 25, prices will stay the same, so you can shop now at today's rates. We've stocked up and stand ready to make sure your orders arrive smoothly during this time.

We're doing everything we can to keep prices low and minimize the impact on you. Our team is working extra hard to improve efficiency and stay true to our mission: to offer great product/fashion at affordable prices for everyone.

Thank you again for being part of the [TEMU/SHEIN] family.

With gratitude,
The [TEMU/SHEIN] Team

So, there we have it. I made out just fine. And if you order in the next few days, you might be fine, too. After that, well, you're screwed — either higher prices or a big duty tax bill, or even both!

Will I enjoy my bubble machine knowing it may be the last sweet, sweet duty-free shipment of bargain-basement plastic junk? Yes, yes I will. But will I feel good about pulling off this last-minute near-heist? No, no I won't. I don't feel good about any of this.

Popular online shopping meccas Temu and Shein have finally broken their silence, warning of potential price hikes starting next week due to Donald Trump's tariffs.

Temu is a China-based e-commerce platform that has grown as popular as Amazon for global shoppers making cross-border purchases, according to 2024 Statista data. Its tagline, "Shop like a billionaire," is inextricably linked to the affordability of items on its platform. And although Shein—which vows to make global fashion "accessible to all" by selling inexpensive stylish clothing—moved its headquarters from China to Singapore in 2022, most of its products are still controversially manufactured in China, the BBC reported.

For weeks, the US-China trade war has seen both sides spiking tariffs. In the US, the White House last night crunched the numbers and confirmed that China now faces tariffs of up to 245 percent, The Wall Street Journal reported. That figure includes new tariffs Trump has imposed, taxing all Chinese goods by 145 percent, as well as prior 100 percent tariffs lobbed by the Biden administration that are still in effect on EVs and Chinese syringes.

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• Shein and Temu said they would raise prices for their products from April 25.
• The retailers said the price hikes were due to "recent changes in global trade rules and tariffs."
• They promised their US customers eight final days of low-price shopping.

Bad news for discount-loving fans of Shein and Temu — both announced on Wednesday that they plan to hike prices.

The two Chinese retailers released almost identical notices on Wednesday, which both read: "Due to recent changes in global trade rules and tariffs, our operating expenses have gone up."

"To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025," Shein's statement said.

President Donald Trump last week imposed a 145% tariff on goods from China. Beijing retaliated with its own 125% tariff on US-made goods.

Both Shein and Temu promised their US customers eight final days of low-price shopping.

"Until April 25, prices will stay the same, so you can shop now at today's rates. We've stocked up and stand ready to make sure your orders arrive smoothly during this time," Temu's statement read.

Shein, a budget fashion retailer known for its massive garment production, and Temu, a low-cost marketplace selling everything from home goods to electronics, have been in Trump's direct line of fire since he entered office.

The president has cracked down on the de minimis trade loophole that allowed small parcels under $800 to enter the US tax-free. Shein and Temu were large beneficiaries of this loophole.

On April 9, he issued an executive order imposing a 120% tax on small parcels under $800 from China, Hong Kong, and Macau.

The order added that per-item postal fees for these parcels would increase to $100 between May 2 and June 1 and to $200 after June 1.

On Wednesday, Hong Kong's postal service announced that it would temporarily halt the delivery of goods from the US, as well as goods from Hong Kong destined for the US.

In a Tuesday press release, Hongkong Post said the suspension was triggered by the US being "unreasonable, bullying, and imposing tariffs abusively."

Representatives for Shein and Temu did not respond to requests for comment from Business Insider.

• I placed an order at Temu just before "Liberation Day" tariffs were announced — as a last hurrah.
• Since then, there's been a lot of on-again, off-again tariff news.
• Will I get walloped with a $75 duty fee on my $8 order? Pray for me!

The past few days with tariffs have been an emotional roller coaster. Not because I checked my 401(k), but because I placed an order from Temu last week — and its fate seems to be hanging in the balance.

In anticipation of "Liberation Day," when tariffs would go into effect, I placed one last Temu order. I figured it might be my final chance to get ridiculously low-priced plastic junk shipped straight from China through the mail (plus, I have a kid's birthday coming up, and I was in the market for some new bubble machine toys).

I snuck in my order just under the wire — and the next day, tariffs shocked the stock market. (Since then, there have been a few other shocks, like on Wednesday when Donald Trump delayed most tariffs for 90 days, except on China.)

Temu's business isn't like say, Apple's, where tariffs could affect the importing to the US of an internationally-made iPhone. Temu ships orders to customers directly from China, using the "de minimis" exception — a longtime loophole that had allowed packages with a value under $800 to be mailed to the US without being subject to duties.

Trump signed an executive order last week ending the de minimis exception. That means packages coming into the US are expected to be subject to a duty, even if their value is under $800.

His initial order meant that these Temu-type packages (ones that would have previously been de minimis) would now be subject to a $25 fee per item, or a fee of 30% of their value. (It's unclear if you'd have to pay the higher or lower of those two options.)

But this week, Trump tripled down — now it's $75 per item or 90% of an order's value.

What do Trump's moves mean for my Temu order?

Yikes. That makes my $8 bubble camera turn into a pretty bad deal.

Thankfully, this all is expected to go into effect starting on May 2nd, and my package is expected to arrive before then. I know, I know, you're practically weeping with relief for me.

According to Temu's website, my order has cleared customs and is on its way — with an estimated delivery window of April 10-17.

What does this all mean for Temu's business — and the business of Shein, a Chinese company that also has used the de minimis exception? Well, it's not looking great, I'll say that.

Temu is running a "Temu Week" promotion at the top of its site and app, which it's done before to compete with Amazon's Prime Week. (It wasn't immediately clear if prices were lower on certain items as part of Temu Week.) I asked Temu if this was an already-scheduled promotion or if it was in response to the tariffs, and I didn't get a response.

Temu has already been diversifying its shipping supply lines, with local warehouses in the US that would theoretically neutralize the loss of the de minimis loophole. But now, with these new heavy tariffs, items being shipped into the warehouse from China would likely be hit with the charges.

Based on how quickly things have changed over the last week, it's hard to guess exactly what this will mean long-term, either for a $5 gizmo from Temu or a $1,000 iPhone.

My advice? You've got a few days left to order worry-free from Temu before you come close to that May 2 deadline. Do as your conscience sees fit.

• In anticipation of tariffs, I made a hasty last-minute panic buy at Temu.
• Donald Trump has said he'll close the loophole that lets Temu and Shein ship directly to customers without duties.
• Will American consumers like me be able to break their addiction to cheap foreign goods? Who knows!

Last night, as "Liberation Day" was taking effect and the tariffs on imports were being revealed, I did what any American might do in a crisis: I panic-shopped.

I hit up what I thought might be most likely to go extinct: the sweet, sweet low prices on fast fashion and junky plastic that comes straight from China. So, as I read over tweets that were speculating that the tariff rates were determined by ChatGPT, I went onto Temu and frantically placed an order. One last hurrah.

As I placed an order for several bubble wands and machines (I have a child's birthday coming up, so this was a somewhat intentional shop, admittedly), I couldn't help but wonder: Wow, is this it?

Will this be the end of a $2.74 mousepad that leaks goo all over me (which happened with an actual mousepad I bought from Temu)?

Is this the end of kids making fun of their parents for becoming "Temu victims?"

Is this the end of Temu being used as a new slang insult?

Right now, I'm not sure.

I checked the prices of the items I bought late Wednesday again on Thursday morning, post-tariff announcement. (It's not clear when exactly each tariff will start to take effect.) So far, no change in prices. The Temu website had no pop-ups or banners or warnings that prices might change due to the new tariffs.

Temu is in a bit of a unique position compared to other consumer goods you might buy that were made in China. Temu and fast-fashion retailer Shein's whole business is shipping your order directly from China, using the de minimus exemption — an old law that allows items under $800 to be shipped to the US duty-free.

Basically, if Walmart imports T-shirts made in China, it has to pay tariffs, which will likely be passed onto me in the price tag when I buy one at the store. But if I order a single T-shirt from Shein, it ships directly to me with no duty taxes at all — which is one of the ways Temu and Shein were able to keep prices so low.

So, you might think that Temu would be uniquely spared from the tariffs. But Trump just signed an executive order that would close that de miminis loophole, and add on either a 30% duty or a flat $25 fee (which would go up to $50 by June 1).

The White House's official announcement of the order, which is set to go into effect May 2, says that this is to stop the flow of illegal synthetic opioids like fentanyl that are shipping into the US from China through the mail. I don't know all that much about the illegal drug trade, but I always assumed the margins are fairly healthy; it may be an industry able to absorb a tariff.

Hopefully, my Temu order will arrive before May, and I'll have been able to sneak under the wire with my last reckless sprint of consumerist impulse. Am I proud of this? Absolutely not. Trust me, I feel as bad as I should.

(The announcement from the White House was rough for Temu's parent company, PPD Holdings, and others, like Alibaba, whose stocks plummeted on Thursday.)

I have no idea what will happen with Temu and Shein or other retailers that have transformed their industries in the last few years by offering unbeatable prices. Will consumers finally kick their habit of hyperconsumption? Will it put these companies out of business if shoppers have to pay big duty fees? No clue!

Right now, we're in a weird moment where it's not totally clear what's going to happen (although it seems … probably "bad.") I only tell you how I feel:

• Temu is hiring from Amazon and Walmart to recruit US sellers.
• Temu continues to hire business development managers to entice brands to sign up.
• The company aims to expand its US seller base as it faces the potential end of de minimis shipping.

Temu has been hiring employees from e-commerce incumbents like Amazon and Walmart as it looks to recruit US sellers.

The Chinese e-commerce company has said it's been making a big push to hire business development managers. At Temu, working in business development involves bringing new brands and manufacturers onto its site and then helping them develop selling strategies, according to LinkedIn postings. Managers pitch potential vendors on the advantages of selling on Temu, and once they've been onboarded, they guide them in product planning, marketing, and other operations.

Many of these new hires have joined Temu in the last six months and previously held similar positions at more established e-commerce companies. At least a dozen have previously worked at Amazon, according to Business Insider's analysis of LinkedIn profiles. Temu has also hired people from Walmart, which has a third-party online marketplace, and TikTok, which has quickly built up a base of sellers with its e-commerce offering, Shop.

"We have been expanding our team to help bring more US sellers onto the platform, giving them more choice and a low-cost way to grow their businesses," a Temu spokesperson said. "To support this, we have hired experienced people to help expand opportunities for local sellers and strengthen local sales."

Temu's business development managers have also attended e-commerce conferences, including several that are popular with Amazon sellers, like the Prosper Show. In their pitches to potential vendors, they tend to emphasize Temu's rapid growth and huge assortment of products.

Temu expands in the US

When Temu first launched, it operated using a managed marketplace model in which manufacturers consolidated their inventory into warehouses in China and then shipped to consumers across borders.

Temu still fulfills many of its orders that way, though it officially opened its marketplace to US sellers in March 2024 and has been growing its base of local sellers since then. This newer model allows sellers with US warehouses to handle fulfillment and logistics themselves.

It also helps Temu to hedge against changes to the de minimis provision, a part of US customs law that allows shippers to avoid paying duty on shipments going directly to customers and valued at less than $800. De minimis helps retailers like Temu and Shein keep costs low, though critics say the provision hurts American manufacturers and allows for the import of illicit goods like fentanyl.

The Trump administration has said it would bring an end to de minimis once customs officials establish a new process for collecting duty on packages sent using the provision.

Rick Watson, the CEO and founder of RMW Commerce Consulting, said since the US is Temu's largest market, there's "a lot of risk if seller recruitment efforts do not succeed here."

"It takes experience to understand how and where to recruit sellers, so it's very common for these types to go from one company to another," he said.

Besides in the US, Temu is hiring business development managers in Europe, Canada, and the UK.

Temu's parent company PDD Holdings, which also operates Pinduoduo in China, reported 24% revenue growth for the fourth quarter of 2024 on Thursday.

During the earnings call, co-CEO Lei Chen referred to "changes in the external environment" that could pose "challenges to our global business," but did not specify what those changes were. He said the company would "continue to explore new business models" and "experiment with innovative localized supply chain solutions."

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• Forever 21 is now navigating its second bankruptcy in five years.
• The brand was known for limited-run collections that turned the typical apparel cycle on its head.
• It also laid the groundwork for brands like Temu and Shein, which won over much of its business.

Forever 21, the once iconic fast fashion mainstay of shopping malls, is now navigating its second bankruptcy in five years, as rising costs and new competition have led to several years of financial losses.

For decades, the brand was a popular choice for budget-minded shoppers, offering limited-run collections that turned the typical apparel cycle on its head.

Forever 21 was once one of the fastest-growing fashion retailers in the world, laying the groundwork for brands like Temu and Shein, which the company later cited as threats to its existence.

Here's a look back at the rise and fall of Forever 21.

The company was founded in 1984 by married couple Jin Sook and Do Won "Don" Chang in Los Angeles.

The couple arrived three years earlier from South Korea with basically no money, no degrees, and nearly no English.

Jin Sook worked as a hairdresser while Don worked as a janitor, pumped gas, and served coffee.

Don said he noticed that the nicest cars were driven by people in the garment business.

Originally called Fashion 21, the Changs' first location in 1984 was a 900-square-foot clothing store they opened with $11,000 in savings.

The store made $700,000 in sales in its first year.

Soon the Changs were opening a new location every six months.

They also rebranded as Forever 21, saying that he store was "for anyone who wants to be trendy, fresh and young in spirit."

The company pioneered the concept of "fast fashion" to stay on-trend.

Jin Sook eventually approved more than 400 designs a day, some of which got the company into trouble with other brands.

By 2015, Forever 21 had 480 US stores and $4.4 billion in global sales.

The Changs became one of America's wealthiest couples, with a combined net worth reaching an estimated $5.9 billion in March 2015.

A goal of 600 worldwide stores and $8 billion in sales by 2017 proved too lofty.

As the company focused on growth, some of its styles became more predictable, while competitors like H&M and Zara gained market share. An executive later said that opening stores in 47 countries in less than six years introduced a lot of "complexity" to the business.

Competition from e-commerce brands also started to eat away at sales.

Brands like Fashion Nova began churning out styles, not to mention the rising influence of Amazon.

Some designs and partnerships didn't exactly help the brand stay relevant with young shoppers, either.

Some social media users have mocked some of its recent designs over the last 6 years, including some from Cheetos, Top Ramen, and the United States Postal Service, as driving Forever 21's financial troubles.

Burdened by $500 million in debt, the company filed for bankruptcy for the first time in 2019.

"Filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future," the company said at the time.

In 2020 — just before the pandemic — Forever 21 reached a deal.

A strategic partnership between Authentic Brands Group and two shopping center owners, Simon and Brookfield, was intended to revitalize the mall-rat-favorite brand.

Brookfield later sold its stake.

The pandemic brought a litany of new headaches — namely inflation and supply chain challenges.

Although the company enjoyed a period of success following the bankruptcy sale, it later said things have deteriorated since 2021.

New competitors, like Shein and Temu, also turbocharged the fast fashion game.

Under a trade rule known as the "de minimis" exemption, e-commerce retailers can ship packages worth less than $800 to the US from overseas without paying a tariff, passing some of the savings along in the form of lower prices.

In March, Forever 21 once again filed for bankruptcy.

The company blamed the "de minimis" rule for partly undercutting its ability to compete on price with "non-US online retailers."

The financial hole has gotten steep, with more than $550 million in losses over the past four years, per the company's filings.

The company now plans to close several underperforming stores as it looks for a buyer to keep the brand alive, albeit likely at a fraction of its peak scale and cultural influence.

Forever 21's future is far from certain, but one possibility is that it could live on as an e-commerce brand.

"This would make Forever 21 a shadow of its former self, but a sale is possible as e-commerce and brand groups may show some interest," GlobalData retail analyst Neil Saunders said in a note.

Other former titans of 20th Century retail, like Bed Bath & Beyond, have previously shed their prior physical presence for an online-only brand that capitalizes on the loyalty and recognition of the original.

• Forever 21 just filed for its second bankruptcy in five years.
• The former icon of American fast fashion partly blamed its troubles on Shein and Temu.
• In particular, the company said the "de minimis" exemption gives it a disadvantage with tariffs.

Forever 21 is navigating its second bankruptcy in five years, but this time around it has a new problem.

For decades, the mainstay of American shopping centers was a fast fashion icon, featuring branded collaborations with everyone from Cheetos to the United States Postal Service.

But now the company faces fresh challenges, beyond the decline of shopping malls and rising costs. Specifically, it's partly blaming Chinese e-commerce and a foreign trade rule regarding small shipments that has gotten a lot of attention this year.

"The Debtors' business has been materially and negatively impacted by the ability for online retailers to take advantage of the 'de minimis exemption' which exempts goods valued under $800 from import duties and tariffs," F21's co-chief restructuring officer Stephen Coulombe wrote in a court filing Sunday.

The "de minimis" rule to which Coulombe is referring allows smaller parcels to enter the country without a tariff — for example, a low-cost phone case or a $20 dress.

By sending a lot of small packages directly to US shoppers, some foreign e-commerce retailers are able to avoid paying tariffs that would otherwise apply if that same merchandise arrived via a larger, more expensive shipment to be later packed and delivered (or sold in stores).

An estimated 1.4 billion shipments arrived in the US under the exemption last year, according to US Customs and Border Protection.

"Certain non-U.S. online retailers that compete with the Debtors, such as Temu and Shein, have taken advantage of this exemption and, therefore, have been able to pass significant savings onto consumers," Coulombe added.

The world got a vivid picture of how this "de minimis" rule works back in February when President Donald Trump ended the exemption, quickly causing a backlog of packages that needed US recipients to pay a tariff on. Trump soon reversed course.

Forever 21's bankruptcy statement is a remarkable one for a US retailer to make, as Business Insider Emily Stewart noted last month.

"Most retailers don't outright say that Shein and Temu are a problem for them," she wrote. "It's not a great look to admit that you're hemorrhaging customers because you can't compete with e-commerce companies selling the lowest-quality, lowest-priced versions of everything you make."

• Sales for Shein and Temu slowed after Trump announced tariffs and de minimis changes.
• Shein's sales growth dropped significantly.
• The de minimis loophole remains open — for now.

Shein and Temu's sales slowed in the weeks after Trump announced tariffs and said he would close the de minimis loophole, February data from Earnest Analytics showed.

Shein seemed to take more of a hit than Temu. Between the weeks that ended February 1 and February 22, its sales growth slowed from 22% year over year to 9.6% year over year.

Temu's sales also decelerated, though at a slower rate, from 15.4% to 14.4%, which Earnest's head of marketing, Michael Maloof, said was in line with its usual weekly fluctuations. Earnest analyzes debit and credit card transactions from millions of US consumers.

By the week of March 1, Shein's sales growth was back up to 21.4% year over year.

The ups and downs demonstrate how closely US consumers are watching the news cycle — and could be a preview of what's to come when the Trump administration ends de minimis shipping for good.

"Nothing materially changed from an import perspective for Temu and Shein during February, and yet customers made fewer transactions during that period," Maloof told Business Insider. "The later recovery suggests this pullback could have been more news-driven than fundamentals-driven."

Representatives for Temu and Shein did not return a request for comment from BI.

The weeks when Shein's sales decelerated coincided with a series of whiplash moves in global trade.

In early February, Trump issued an executive order closing the de minimis loophole while imposing tariffs on China, Canada, and Mexico. (The administration has since rescinded some of the tariffs on Canada and Mexico). De minimis, also known as Section 321, is a provision of US customs law that allows retailers to import goods duty-free as long as they are valued at less than $800 and sent directly to customers.

The announcement that de minimis shipping would no longer be allowed sent much of the retail world into chaos. While Shein and Temu's use of de minimis brought the provision into the mainstream, many other brands selling directly to consumers also use the loophole to find cost savings.

US Customs and Border Protection said in a January press release that de minimis shipments increased by more than 600% from fiscal year 2015 to fiscal year 2023, going from 139 million a year to more than 1 billion. More than 1.36 billion shipments were sent via de minimis in fiscal year 2024, according to CBP.

Just a few days after the executive order was issued, Trump issued a follow-up order saying that the loophole would remain open until customs officials could establish a new process for collecting duty on packages sent using the provision.

Logistics experts expect de minimis to go away soon, though the exact timing is still unclear.

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