Temu and Shein drop US ad spending as they face tariffs on even small sales

Two of China’s largest fast fashion retailers, Temu and Shein, have warned US customers that they will face price increases from next week, as Donald Trump’s hefty tariffs on Chinese imports come into force.

Both companies will be hit by new import levies, which will mean taxes of up to 145% being applied to Chinese goods. They will also suffer from Trump’s cancellation of the “de minimis” exemption, under which shipments worth less than $800 (£600) could be imported duty-free.

That exemption was crucial in helping the low-cost retailers make inroads into the US market, where they were able to send low-cost online purchases with few expenses. It will be removed as of 2 May.

“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up,” Shein’s customer notice said.

“To keep offering the products you love without compromising on quality, we will be making price adjustments starting 25 April 2025. We’re doing everything we can to keep prices low and minimise the impact on you,” the company said.

Under Trump’s original plans, previously exempt packages were due to be hit with a tariff rate of 30% or $25 an item, rising to $50 an item by 1 June. However, after China responded with retaliatory tariffs last week, Trump hit back by tripling the rates for previously exempt packages to 90% or $75 an item, rising to $150 on 1 June.

Some experts say it is unlikely to deter all customers, given that items from Temu and Shein could still end up cheaper than some rival retailers.

Meanwhile, the imposition of US tariffs has prompted the retailers to cut spending on US social media advertising, which has also bolstered their profile among young and thrifty shoppers.

Temu’s daily average US ad spend on Facebook, Instagram, TikTok, Snap, X and YouTube declined by a collective average of 31% in the two weeks from 31 March to 13 April compared with the previous 30 days, according to the digital marketing company Sensor Tower.

Meanwhile, Shein’s daily average US ad spend on Facebook, Instagram, TikTok, YouTube and Pinterest fell a collective average of 19% over the same period. Mark Ballard, the director of digital marketing research at Tinuiti, said Temu had sharply reduced ads on Google Shopping since 12 April.

Meta declined to comment, while Google, Shein and Temu were not immediately available for comment.

Reuters contributed to the report