Temu Promoting ‘Local’ Items Even After Reversal of ‘De Minimis’ Exemption

“Local” products are showing up strong on the Temu app. The Chinese-owned shopping platform is clearly promoting items that can be shipped from U.S.-based warehouses.

Per the New York Post, customers buying products listed with the green “local” badge means Temu can avoid fees associated with U.S. customs. “Lightning deals” featuring local items, many with super-fast shipping, are being displayed prominently on the retailer’s app and website.

Temu began pushing this strategy after the Trump Administration enacted a 10% tariff on products imported from China. The new tariff rules eliminated the longstanding “de minimis” exemption, a legal loophole that allowed packages with values less than $800 into the U.S. without duty fees. Discount retailers like Temu and SHEIN utilized the exemption for years to sell cheap items to consumers in the U.S., leading to unprecedented growth for the two Chinese companies.

Ultimately, President Trump paused the 10% tariff rule on products coming in from China. Along with that, the de minimis exemption is back in place for now after Trump signed an executive order on Friday that put a pause on the exemption’s closure, according to CNBC. If the rule had remained, consumers could have lost the great deals often found on Temu and SHEIN. The companies would have little choice but to raise prices on items imported into the U.S. Shipping delays would also be common as smaller, less-valued items would be stopped and inspected by customs agents.

Temu’s Strategy To Avoid Tariffs

By promoting “local” items, Temu is preparing for a future of uncertain and potentially changing customs regulations. As the talk of applying tariffs to Chinese goods ramped up in 2024, the company began quietly employing a strategy to keep prices low and improve shipping times. To avoid tariffs and customs, Temu signed partnerships with numerous U.S. sellers in the spring of last year. By summer, nearly 20% of customer orders were fulfilled by domestic merchants.

With local items in focus on the app, U.S.-based retailers like Walmart and Amazon are feeling the pressure of increased competition from Temu. Ideally, customers can get orders faster than before and the discounter does not need to rely on Chinese sellers as much. Amazon recognized and responded to Temu’s competitive threat by launching its own discount platform — Haul — in November 2024.

SHEIN is following suit by recruiting more U.S. sellers. The discounter has even gone as far as opening a supply chain hub in Washington state and several distribution centers in Illinois and California.