Temu, Shein Slash Massive US Ad Spend, Threaten Higher Prices Over Tariffs

Temu and Shein, rapidly growing Chinese e-commerce platforms, are scaling back their U.S. expansion plans due to tariffs and trade restrictions. These companies, known for low prices and aggressive marketing, are cutting U.S. advertising spending significantly. Both platforms are notifying customers of upcoming price increases, citing rising operating expenses due to tariffs. The pullback is directly linked to renewed trade tensions and the ending of the de minimis exemption, impacting duty-free imports. This shift is eroding the price advantage that fueled their initial growth in the U.S. market. The decline in advertising spending could negatively impact major U.S. advertising platforms like Meta. Temu and Shein were previously major advertisers, with Temu topping X’s U.S. advertising charts last year. The loss of the de minimis privilege, ending duty-free imports under $800, has bipartisan support. Amazon and other U.S. retailers may now find an opportunity to regain market share. Further tariff hikes could make the future even more challenging for these Chinese e-commerce upstarts.