Temu, the e-commerce platform owned by China’s PDD Holdings, topped Apple’s list of the most downloaded free apps on the U.S. iOS store for the second consecutive year. This highlights the growing success of Chinese apps in the U.S. market, with TikTok ranking third and Temu’s competitor, Shein, at number 12.
Temu entered the U.S. market in 2022 and has since disrupted established players like Amazon with its aggressive pricing and marketing strategies. However, its rapid success comes amid rising scrutiny from U.S. officials and the looming threat of increased tariffs under Donald Trump’s incoming administration.
A key concern for companies like Temu and Shein is the “de minimis” trade provision, which allows imports valued under $800 to bypass certain import duties. In September, the Biden administration proposed reforms to address perceived “overuse and abuse” of this provision, aiming to level the playing field for domestic producers. If the exemption is eliminated, Temu and Shein could face higher costs, pushing up prices and potentially reducing their competitive edge.
Adding further uncertainty, Trump has promised to impose tariffs of 60% to 100% on Chinese goods, a central theme of his campaign. While the feasibility of these measures remains unclear, trade experts suggest they could significantly impact Chinese exports to the U.S.
Nomura analysts predict that tightening the de minimis rule would be a key trade priority for Trump, second only to tariff hikes. Their report estimates that banning all de minimis imports from China could cut China’s annual export growth by 1.3% and lower GDP growth by 0.2%.
Temu and other Chinese e-commerce platforms also face mounting challenges outside the U.S. In Southeast Asia, countries like Vietnam, Indonesia, and Thailand have taken steps to curb the influx of cheap Chinese goods. Vietnam, for instance, recently banned Temu just two months after its local launch, citing concerns about market disruption.
Despite these challenges, Temu’s continued dominance in the U.S. highlights American consumers’ appetite for affordable goods. However, the company’s future growth may hinge on navigating trade policy changes, increasing tariffs, and regulatory headwinds as global markets adjust to evolving economic priorities.
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