Shein and Temu warn tariffs will raise prices in US

Shein and Temu, two prominent online retail companies based in China, have recently issued warnings to their customers in the United States about an impending increase in prices. This change is set to take effect next week, following the announcement of significant tariffs imposed by President Donald Trump on goods imported from China. In nearly identical statements, both companies have acknowledged that their operating costs have risen due to recent modifications in global trade regulations and tariffs. They have indicated that they will be adjusting their prices starting from April 25. Shein and Temu have gained immense popularity in the US, attracting millions of customers with their incredibly low prices. This surge in popularity has put pressure on Amazon, which has responded by launching a new platform called Haul last November, featuring items priced under $20. Since President Trump resumed his presidency in January, he has implemented tariffs that can reach as high as 145% on imports from China. This week, his administration revealed that when the new tariffs are combined with existing ones, the total levies on certain Chinese goods could soar to 245%. Furthermore, Trump has eliminated a duty-free exemption for goods valued at less than $800, a move that had previously allowed Shein and Temu to quickly establish a foothold in the US market. US lawmakers from both political parties have expressed concerns regarding the rapid growth of these companies. According to US customs authorities, approximately 1. 4 billion packages entered the US under this arrangement last year, a significant increase from 140 million in 2013. Since the introduction of these tariffs, both Shein and Temu have experienced a notable decline in the rankings of their mobile applications. Temu has fallen to the 75th position among the most downloaded free apps on the US Apple Store, a stark contrast to its consistent presence in the top five spots over the past two years. Shein has also seen a drop, now ranking 58th, down from 15th place just a month ago. However, other Chinese retail applications continue to perform well in the US market, with DHgate holding the second position and Alibaba's Taobao in seventh place. In response to the changing market conditions, Shein and Temu have significantly reduced their advertising expenditures in the US. Temu has ceased all of its Google Shopping ads in the US as of April 9, according to Mike Ryan, the head of e-commerce insights at an online advertising agency called Smarter Ecommerce. He noted on LinkedIn that Temu's average daily advertising spend on social media platforms, including Facebook, Instagram, and YouTube, has decreased by 31% in the two weeks leading up to April 13, compared to the previous month. Similarly, Shein's average daily ad spending in the US has dropped by 19% during the same timeframe, as reported by market intelligence firm Sensor Tower. In their statements, both Temu and Shein have encouraged customers to make their purchases before the price increases take effect. They stated, 'We stand ready to ensure that your orders arrive smoothly during this time. We are doing everything we can to keep prices low and minimize the impact on you. Our team is working diligently to enhance your shopping experience. ' As of now, both Shein and Temu have not responded to requests from the BBC for further comments.