Excerpts:
"The closure of a trade loophole and prohibitive tariffs on China have upended Temu and Shein's business model in the United States. And yet the e-commerce companies are likely to remain a dominant force in American online retailing, experts suggest.
On Friday, the de minimis rule — a policy that had exempted U.S. imports worth $800 from trade tariffs — officially closed for shipments from China. This has seen Temu and Shein exposed to duties as high as 120% or a flat fee of $100, set to rise to $200 in June.
...In recent days, Temu, which is owned by Chinese e-commerce giant PDD Holdings, has begun exclusively offering goods shipped from local warehouses to U.S. shoppers. Many of those goods are still sourced from China but then shipped in bulk to U.S. warehouses, according to experts. While these bulk items are subject to tariffs, they also benefit from economies of scale."
"If there's one thing that Chinese companies are good at, it's operating on a razor thin margin in an intensely competitive, if not adverse environment ... they find every scrap that they can to survive," he added.
Temu, which had increased prices of orders shipped directly from China, told CNBC on Tuesday that "pricing for U.S. consumers remains unchanged as the platform transitions to a local fulfillment model."
Jason Wong, who works in product logistics for Temu in Hong Kong, noted this dynamic when speaking to CNBC last month, likening Temu to a dollar store.
"If prices at the dollar store go from $1 to $2, it's still a dollar store", he said.