Temu’s Big Pivot in the U.S. Market: What It Means for Importers and Sourcing Businesses

Subtitle: A Wake-Up Call for Global E-commerce and Cross-Border Sourcing Strategies

TL;DR (Too Long; Didn’t Read)

Temu has abruptly ended direct shipping from China to the U.S., shifting entirely to local fulfillment. This marks a major turning point due to new U.S. customs rules. As a sourcing company with 10 years of experience, we break down what happened, what it means, and how importers and suppliers should respond.

What Happened? Temu Pulls Out of China-to-U.S. Direct Shipping

In a surprising move, Temu recently ceased all direct shipments from China to the United States. From now on, only U.S.-based sellers and inventory will be fulfilling orders on Temu’s American platform.

Products that used to ship from China now show as “out of stock,” and Temu is heavily promoting “local warehouse” items—highlighting “no import fees” as a new selling point.

But behind this shift is a much bigger story: a policy change that shattered Temu’s core advantage.

Why the Sudden Change? The End of the T86 Loophole

Temu thrived in the U.S. by leveraging the T86 customs clearance model, which allowed Chinese sellers to avoid duties for shipments under $800.

Temu split large shipments into countless small parcels to bypass import taxes. This loophole helped them offer ultra-low prices and compete directly with Amazon FBA sellers, who had to pay full duties.

But starting May 2, 2025, the U.S. Customs and Border Protection (CBP) closed this loophole. Temu must now:

  • Pay 120% of declared value in duties, or

  • Opt for $100 per parcel fixed tax (rising to $200 from June), or

  • Use the costly T01 clearance, with even higher tariffs

Result: The China-to-U.S. fulfillment model is no longer viable.

Full-Service Temu Stores “Wiped Out”

By late April, many Chinese full-managed stores on Temu’s U.S. site were quietly shut down or shown as “on break.” Some sellers saw their listings disappear overnight.

Temu tried to cushion the blow:

  • Reduced traffic to affected listings

  • Raised prices

  • Quietly removed full-managed products

But by May, the shift was clear—Temu had effectively pulled the plug on its China-based full-service fulfillment model in the U.S.

Switching to a “Half-Managed” Model… But Can It Work?

Temu is now pivoting to a “half-managed” model, where U.S.-based sellers store inventory in local warehouses and handle logistics themselves.

Sounds like a Plan B, but there’s a problem:

  • These sellers must pay full customs duties

  • They lack Temu’s volume-based logistics advantage

  • Many are not willing to fight the low-price war alone

Temu’s ability to attract sellers is shrinking. Without unbeatable prices and traffic from cheap Chinese listings, what does Temu offer sellers now?

No Price Advantage, No Ads = Traffic Crash

Temu’s low prices used to pull in massive U.S. traffic. But now?

  • Many product prices have doubled

  • Temu stopped Google Shopping ads in the U.S.

  • App Store rank plunged to #58

Temu’s two biggest growth engines—ultra-low prices and heavy advertising—are both stalling.

Looking Abroad: Europe, Brazil… But It’s Not Easy

Temu is shifting its focus to Europe and Latin America, pouring resources into ad spend in:

  • France (+40% ad budget)

  • UK (+20%)

  • Brazil (800x increase)

But these regions are no silver bullets:

  • Europe is fragmented by language, laws, and tax systems (like VAT & packaging rules)

  • France plans a 2026 import fee on small parcels—paid by platforms, not buyers

  • Brazil and Chile have weaker consumer power and trade barriers

Even Indonesia rejected Temu’s entry, citing pricing strategies and regulatory concerns.

What This Means for Importers and Sourcing Professionals

As a China-based sourcing company with 10 years of hands-on experience, we’ve helped hundreds of clients navigate supply chain shifts like this.

Here’s what you need to know now:

  • China-to-U.S. direct shipping will become less viable for cheap goods

  • DDP fulfillment (duties paid) from China must be carefully costed out

  • Local fulfillment or hybrid warehousing will become essential

  • Logistics partners and sourcing agents must adapt fast

At SourcingXpro, we’ve already helped our clients transition from fragile direct-shipping models to more sustainable hybrid solutions. With changes like the end of T86, having a professional sourcing team you can trust is no longer optional—it’s essential.

Final Thoughts: Temu’s Lesson for the Industry

Temu’s rise—and now its struggle—teaches us one thing:

Supply chain agility is everything.

For importers, brands, and even other marketplaces, the days of blind reliance on “China direct + loophole logistics” are over. Now is the time to rethink your strategy, reinforce compliance, and build resilient sourcing pipelines.

If you’re unsure how to adapt your importing or fulfillment model to these new rules, SourcingXpro is here to help.

Want a custom sourcing strategy that works in the post-T86 era?
Contact our team for a free consultation.