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Temu’s U.S. Ad Spend Crashes as Tariffs Bite Hard

Temu, the Chinese discount shopping app owned by PDD Holdings, is facing turbulent times in the U.S. market. Once a dominant force in digital marketing—peppering Americans with catchy ads and irresistible low-priced product offerings—Temu has now significantly reduced its ad presence online.

And the results are immediate: The platform, which once dominated Apple’s App Store, has plunged in app ranking, with downloads reportedly falling 62% in recent days, according to SimilarWeb.

The Tariff Trigger: Trump’s Trade Move

The sharp pullback comes in direct response to former President Donald Trump’s new round of tariffs aimed at Chinese imports. These tariffs, which impose a 145% rate on certain products shipped from China, are a massive blow to Temu’s low-margin, high-volume business model.

One of the biggest hits is to the “de minimis” rule, which currently allows packages valued under $800 to enter the U.S. duty-free. This provision, set to be removed by May 2, 2025, has been central to Temu’s shipping strategy. Without it, even the smallest purchases will face heavy import duties—shaking the foundation of its value-driven proposition.

Ad Blitz to Ad Freeze: From Super Bowl Fame to Silence

Temu made headlines in 2023 with its flashy “Shop Like a Billionaire” campaign, including high-profile placements during the Super Bowl. The brand’s advertising machine ran at full tilt across platforms like Facebook, Instagram, Google, and YouTube, promoting ultra-cheap goods like $5 t-shirts and 50-cent beauty tools.

Now, much of that marketing push has gone dark. Analysts at Pathmatics and Sensor Tower estimate that Temu has reduced its digital ad budget by more than 60% in April 2025 alone. Facebook and Google ads that used to dominate user feeds have largely vanished.

What This Means for Shoppers

Shoppers are already feeling the changes. Temu posted a notice on its site stating:

“Due to recent changes in global trade rules and tariffs, our operating expenses have gone up. To keep offering the products you love without compromising on quality, we will be making price adjustments starting April 25, 2025.”

And it's not just Temu. Rivals like Shein, which also relies on China-based logistics and manufacturers, are preparing for similar price hikes. Both companies warned customers this week of increased prices, citing surging operational costs due to the evolving trade landscape.

Ripple Effect on U.S. Marketplaces

The effects of these tariffs aren't limited to Chinese retailers. Many third-party sellers on Amazon—a significant number of whom source inventory from China—have voiced concerns about rising costs and potential price adjustments. Likewise, sellers on TikTok Shop, which has rapidly expanded its e-commerce footprint in the U.S., are bracing for impact.

In response, Amazon has launched Amazon Haul, a direct competitor to Temu featuring budget-friendly items under $20—many of which are sourced from Asia. But with rising tariffs, even Amazon’s bargain section may need to adjust pricing.

A New Era for Cross-Border E-commerce

Temu’s plummeting app rank, combined with rising tariffs and disappearing ads, signals a turning point for Chinese e-commerce players in the U.S. The once untouchable “cheap and fast” formula is being redefined as trade policies tighten.

As the U.S. clamps down on China’s low-cost exports, both consumers and businesses are entering uncharted waters—where prices go up, competition stiffens, and giants like Temu must either adapt or retreat.

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