Temu quietly makes drastic decision as consumers switch gears

Temu, a Chinese online marketplace that sells a wide range of products priced between $1 and $50, is facing a significant threat.

Last week, President Donald Trump imposed a massive 145% tariff on all goods imported from China, a startling increase from the previous 34% tariff he enforced on the country earlier this month.

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​​Tariffs are taxes companies pay to import goods from overseas, and the additional cost frequently filters down to consumers through price hikes.

Related: Temu lawsuit says low prices on app covers its harmful intentions

Many consumers are already concerned that Trump’s tariffs could potentially increase the prices of products produced in China.

According to a recent survey from Omnisend, 56% of Americans are worried that tariffs will increase prices. Also, 29% of Americans said that if prices rise, they would immediately stop or make fewer purchases from sellers in China.

Temu makes an unexpected move

Amid this growing threat, Temu has decided to dramatically pull back its advertisements on Google and Meta, which owns Instagram and Facebook.

According to recent data from Tinuiti, Temu purchased almost 20% of U.S. Google Shopping ad impressions on April 5. By April 12, that number had declined to zero and has remained at or below 10% since then.

PDD Holdings Inc.’s Temu application is displayed on a smartphone.

Image source: Raul Ariano/Bloomberg via Getty Images

Mike Ryan, head of e-commerce insights at Smarter Ecommerce, flagged on LinkedIn that “starting April 9th, Temu turned off all their Google Shopping ads in the U.S.”

Temu’s U.S. ad spending on Meta also declined by 10% year-over-year during the first quarter of 2025, according to market research firm Sensor Tower.

The firm also found that the Temu app now ranks No. 80 on a list of the top free apps in the U.S. on the App Store. Previously, it consistently made the top 10.

The sharp decline in app downloads comes after Temu posted a notice on its website warning customers that it will have to raise prices due to the global trade war.

Related: Amazon changes a cheap service amid growing threat

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

Greg Zakowicz, senior ecommerce expert at Omnisend, previously warned in a February press release that if Temu hiked prices in response to tariffs, it may impact several particular categories on its website.

“Temu may still be able to undercut the prices of domestic products on Amazon as they have such high margins,” said Zakowicz. “However, I expect consumers will soon see price hikes, particularly in categories including consumer electronics, beauty, children’s clothing, and household goods – all categories that are popular on Temu. If manufacturers have a reason to raise prices – even on existing inventory – they will.”

Temu is facing a new competitor 

Over the past few years, many Americans have gravitated toward Temu for its ultra-cheap prices, giving Amazon significant competition.

According to a survey from Omnisend last year, 57% of American consumers shop at Temu, and 58% of those consumers said that its lower prices were one of the main qualities that attracted them to the platform.

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To combat this growing threat, Amazon (AMZN) introduced its Temu copycat Amazon Haul in November last year. When it was first introduced, Amazon said that most of these items, which are largely unbranded and shipped from sellers in China, would sell for $10 and under, with some priced as low as $1.

However, shortly after Trump announced tariffs on goods from China, Amazon later introduced a new section on Amazon Haul labeled “Brand Faves” that allows customers to shop for name-brand items from Champion, Adidas, Steve Madden, and others. 

These items are shipped from Amazon’s inventory held in U.S. warehouses, and some are sold for over $20. 

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