PDD(PDD) CNBC·2025-04-28 16:15Core Viewpoint - Temu, a Chinese e-tailer, has introduced significant import charges of approximately 145% due to new tariffs imposed by President Trump, which could drastically increase the total cost of products for consumers [1][4]. Pricing Impact - The import charges can exceed the price of the products themselves, with examples showing a summer dress priced at 44.68 after a 142% surcharge, and a child's bathing suit priced at 31.12 after a 150% fee [2]. - A handheld vacuum cleaner listed at 40.11 when factoring in a 137% markup due to import charges [2]. Company Response - Temu has stated that these import charges cover customs-related processes and costs, indicating that the listed amount may not reflect the actual fees paid to customs authorities [3]. - The company acknowledged that recent changes in global trade rules and tariffs have increased its operating expenses, leading to price adjustments starting April 25, 2025 [5]. Competitive Landscape - Rival discount retailer Shein has also raised prices but has not implemented additional import charges, instead including tariffs in the prices displayed at checkout [4]. - Both Temu and Shein had previously warned of price increases following the imposition of a 145% tariff on many imports from China [4]. Market Position - Temu's popularity in the U.S. has surged since its launch in 2022, primarily due to its low prices on various products, which allowed consumers to purchase items without significant financial strain [5][6]. - However, the new import fees may align Temu's prices more closely with U.S. competitors like Amazon, Walmart, and Target, potentially diminishing its competitive edge [6]. Advertising and Market Ranking - Following the announcement of the tariffs, Temu has significantly reduced its online advertising spending in the U.S., resulting in a drop in its app store ranking from the top 10 to No. 73 [7]. - Shein has also experienced a decline in its app store ranking, falling from 15 to 54 [7].