Tariff Shock Triggers Consumer Shift
Temu app, the Chinese e-commerce platform known for its ultra-low prices, is facing mounting pressure after a sharp escalation in U.S. trade tariffs. In a dramatic move last week, former President Donald Trump increased tariffs on Chinese goods to 145%, up significantly from the 34% hike announced earlier this month. These tariffs, essentially import taxes, often lead to higher consumer prices as companies pass costs down the line.
American shoppers are already bracing for impact. A recent Omnisend survey found that 56% of U.S. consumers are concerned about rising prices due to tariffs, with nearly 30% stating they would reduce or halt purchases from Chinese sellers if costs increased. Temu, which has been a go-to destination for bargain hunters, offering items ranging from $1 to $50, is now grappling with an uncertain future as consumers grow wary of price hikes.
Temu Slashes Ads and Warns of Price Increases
In response to the economic headwinds, Temu app has made a significant pivot in its advertising strategy. Once a dominant presence in online ad spaces, the company has dramatically reduced its U.S. advertising on both Google and Meta platforms. According to Tinuiti, Temu controlled nearly 20% of U.S. Google Shopping ad impressions on April 5. By April 12, this figure plummeted to zero, signaling a complete pullback from the space.
Mike Ryan of Smarter Ecommerce noted on LinkedIn that Temu abruptly shut off all Google Shopping ads in the U.S. starting April 9. Similarly, Sensor Tower reported a 10% year-over-year drop in Temu’s Meta ad spend during the first quarter of 2025. At the same time, the Temu app has tumbled in popularity, falling to the 80th spot on the U.S. App Store’s list of top free apps—well below its usual top 10 position.
Temu also issued a public statement on its website, warning users that prices will increase beginning April 25 due to rising operating costs tied to tariffs. “Due to recent changes in global trade rules and tariffs, our operating expenses have gone up,” the notice read. Greg Zakowicz, a senior e-commerce expert at Omnisend, predicted the most noticeable price hikes will affect popular categories like consumer electronics, children’s apparel, beauty items, and household goods.
Amazon Strikes Back with Competitive Push
As Temu navigates turbulent waters, Amazon is moving to solidify its foothold in the value-driven segment of online shopping. Recognizing Temu’s growing appeal among American shoppers—57% of whom used the app last year—Amazon launched its own version of a low-cost marketplace, “Amazon Haul,” in late 2024. This platform offers unbranded, mostly Chinese-sourced items priced as low as $1.
However, after the recent tariff hike, Amazon shifted gears, launching a new “Brand Faves” section within Amazon Haul. This new feature promotes name-brand products like Adidas, Steve Madden, and Champion—all shipped from U.S.-based warehouses. These items are priced higher, often exceeding $20, but they allow Amazon to maintain reliability and speed while responding to changing trade conditions.
With American consumers growing cautious about rising costs and Temu scaling back its marketing efforts, the battle for budget-conscious shoppers is entering a new phase—one defined not just by price, but by adaptability and trust in turbulent times.
