Temu Has Stopped Shipping Orders to the U.S. This Is a Huge Problem for Meta and Google

In February 2024, during halftime of the 58th Super Bowl, Chinese e-commerce giant Temu aired a very special ad titled “Shop Like a Billionaire.” This turned out to be more of a swan song than anything else because this Chinese company (along with others like Shein) now faces a highly complex future in the country.

Temu’s Big Tech ad spending is plummeting. According to The New York Times, in the two-week period beginning March 31, Temu spent 31% less on U.S. advertising on Facebook, Instagram, TikTok, Snap, X, and YouTube than it had spent on those platforms on average in the previous 30 days. The data comes from consultancy Sensor Tower, which also found that Shein cut its ad spend by 19% in those two weeks compared to the average in recent periods.

Temu and Shein spent a lot. Both companies were two of the most significant sources of ad revenue for U.S. Big Tech. According to The Wall Street Journal, Temu spent $2 billion on Meta advertising in 2023 and was one of Google’s biggest advertisers. The New York Times cited an equally impressive estimate: According to Bernstein Research data, Temu spent $3 billion on marketing in 2023.

Plummeting. But the picture has changed dramatically. On April 5, Temu accounted for 19% of all ads served on Google Shopping in the U.S., but a week later, that number dropped to 0%. Shein went from 20% at the beginning of April to 0% on April 16, according to data from consulting firm Tinuiti.

Apps fall in rankings. Temu and Shein’s mobile apps used to be among the top 10 most downloaded apps in the U.S. Their popularity is dropping, and they’ve fallen out of the top 10.

Meta warns. At a recent conference with investors, Meta CFO Susan Li noted that some Chinese e-commerce companies—unspecified—have reduced their ad spending. Last year, Chinese advertisers generated $18.4 billion in revenue for Meta. That’s 11%, and twice as much as in 2022.

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Shein and Temu Respond to Trump’s Tariffs by Increasing Prices on All Products

Pessimism is contagious. After reporting its earnings, Snap noted that “a subset of advertisers” had reduced ad spending due to changes in U.S. shipping rates. It declined to provide estimates for the current quarter, suggesting that the tariffs created uncertainty. Google also expressed concern, with business director Philipp Schindler stating that the tariff changes “will obviously cause a slight headwind to our ads business in 2025.”

The end of de minimis. In April, U.S. President Donald Trump signed an executive order ending the “de minimis” rule. This exemption had for years allowed packages worth less than $800 to enter the U.S. without paying taxes. Platforms such as Shein and Temu used this mechanism to offer highly competitive prices on their goods, but others such as Amazon, Etsy, and eBay also benefited.

Trump has already warned. In February, the U.S. government launched its special tariff war against China, imposing 10% tariffs on all Chinese goods. The end of the de minimis exemption—which had been in place for almost a century—was indeed a death knell. Its impact is enormous, both in China and the U.S. Trump then temporarily suspended the exemption, but now it has been deactivated indefinitely.

Temu stops shipping to the U.S. The executive order has caused Temu to halt all shipments from China to U.S. buyers. A Temu spokesperson told CNBC that all sales in the U.S. are now handled by local sellers and said they are fulfilled “from within the country.” In addition, Temu said pricing for U.S. shoppers “remains unchanged.”

“The move is designed to help local merchants reach more customers and grow their businesses.”

Before the change, shoppers attempting to purchase Temu products shipped from China faced import fees of 130% to 150%, causing many of these products to double in price.

Image | Markus Winkler

Related | Temu Products Are Now More Expensive in the U.S. Due to Tariffs. Despite Trump’s Claims, China Isn’t Paying the Extra Cost