Temu’s Strategic Pricing and Logistics Shifts in a Post-Tariff US Market

In the wake of escalating US-China trade tensions and the removal of the de minimis exemption in 2025, Temu has emerged as a case study in aggressive adaptation. The platform’s recent 60% price cuts on best-selling products, coupled with a restructured logistics framework, signal a bold attempt to reclaim market share in a highly competitive e-commerce landscape. However, the question remains: Can Temu’s tactical shifts sustain long-term viability amid shifting tariffs and entrenched rivals like Shein?

Pricing as a Double-Edged Sword

Temu’s decision to slash prices by 60% on key products was a calculated move to offset the financial burden of tariffs and import fees, which had previously eroded consumer demand. By eliminating buyer-side import charges—a policy that had driven steep price spikes—Temu aimed to restore price competitiveness. According to a report by Bloomberg, this strategy was a direct response to the removal of the de minimis exemption, which had allowed small parcels to enter the US duty-free until 2025 [1].

Yet, the results have been mixed. Despite these cuts, US sales plummeted by over 30% in the summer of 2025, underscoring the limitations of price alone in retaining customer loyalty. The decline highlights a critical challenge: while aggressive pricing can attract attention, it may not be sufficient to rebuild trust in a market where consumers are increasingly wary of volatile costs and delivery delays.

Logistics Overhaul: A Path to Stability

Recognizing the fragility of its pricing strategy, Temu has pivoted to a logistics-first approach. The company is now incentivizing sellers to adopt its fully managed logistics services, which include cross-border shipping, warehouse storage, and last-mile delivery. This shift aims to streamline operations and reduce the financial impact of tariffs by consolidating shipments and optimizing customs clearance [1].

A report from ChinaTalk reveals that Temu has also adopted a T01 customs clearance model for bulk imports and B2B2C strategies to stabilize pricing. These adjustments, combined with a refocused marketing push in the US, have yielded early signs of recovery. By early September 2025, the platform is projected to reclaim 60% of the business lost during the fully managed model’s implementation [2]. While this suggests resilience, the long-term effectiveness of these measures will depend on Temu’s ability to maintain operational efficiency as trade dynamics continue to evolve.

Refocusing on the US and Global Expansion

Temu’s strategic recalibration has not been limited to logistics. After initially shifting marketing efforts to Europe and other global markets, the company has refocused on the US with intensified ad campaigns. This pivot reflects a recognition of the US market’s scale and growth potential, despite its regulatory challenges.

However, the platform faces stiff competition. Shein, a longtime rival, has similarly adapted to higher prices by optimizing its supply chains and leveraging data-driven marketing [3]. The rivalry underscores a broader trend: in a post-tariff environment, e-commerce players must balance cost-cutting with innovation to retain market share.

The Outlook: A Rebound Candidate with Caveats

Temu’s strategic shifts position it as a potential rebound candidate in e-commerce, but several risks persist. While tariffs on US imports are expected to ease slightly, full recovery to pre-2025 levels seems unlikely. Additionally, the company’s reliance on price cuts could erode profit margins, particularly if competitors like Shein match or undercut its offers.

For investors, the key takeaway is that Temu’s viability hinges on its ability to sustain its logistics innovations and adapt to evolving trade policies. If the company can maintain its cost advantages while improving delivery reliability, it may yet carve out a durable position in the US market. However, the path forward remains fraught with uncertainty, requiring close monitoring of both macroeconomic trends and competitive moves.

Source:
[1] Temu Plots Aggressive US Comeback With 60% Price Cuts [https://www.bloomberg.com/news/articles/2025-09-08/temu-plots-aggressive-us-comeback-with-60-price-cuts]
[2] How Temu is rebounding from US tariffs - ChinaTalk [https://www.chinatalk.nl/how-temu-is-rebounding-from-us-tariffs/]
[3] The Unexpected Winners of Trump's Trade War [https://www.wired.com/story/shein-temu-winners-trade-war-trump/]