The recent elimination of a tariff loophole that allowed for tariff-free shipments of goods under $800 from China has significant implications for low-cost online retailers like Temu and Shein. These companies relied heavily on aggressive digital advertising and competitive pricing to attract American consumers. With new tariffs as high as 145% on imports, both retailers are likely to face increased prices and reduced competitiveness. Temu has already initiated changes in its shipping model to adapt, signaling a shift in the landscape of online retail and advertising spending.
The advertising bonanza might be coming to an end after the demise of the shipping loophole that spurred it.
For Temu and Shein, this means they are now subject to tariffs of as much as 145 percent to bring over Chinese goods.
Temu started adding import charges to certain products, which more than doubled the overall price to buy and ship the items.
The new tariffs are expected to deal a punishing blow to companies built on selling goods at rock-bottom prices.
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