NO, CANCELLATION OF DE MINIMIS WOULD NOT KILL TEMU AND SHEIN

... but the new US tariffs will if they remain unchanged. And it will also kill off a lot of the business of Chinese merchants and importers of Chinese goods on Amazon, Walmart, etc.

There is a harsh misunderstanding that the cancellation of de minimis in the US will stop successful Chinese cross-border e-commerce platforms like Shein and Temu. The same will happen if the 150 euro tax exemption is cancelled in the EU. Temu and Shein have been preparing for this, as they should. As far as I'm concerned, it is a good decision to create a more level playing field if these platforms pay the same taxes as bulk importers.

Many people think these platforms' success is purely based on the tax exemption, which is a dangerous misunderstanding. Even with de minimis, Temu remained unprofitable, although they expected to become profitable this year.

Our research at Tech Buzz China has shown that cancelling de minimis would move that break-even point to 2026, demonstrating that the success of their business does not simply come from the tax exemption.

What is killing Temu and Shein's business is the extremely high tariffs of 145%. Temu had foreseen that it would be able to handle any tariff rise to around 50%. Simple cancellation of de minimis would have meant regular taxation per product category that remained under this level. The 145% does not, and neither do the $30 fees per package that the White House announced.

That 145% applied to (almost) all goods imported from China, so it will hurt many other platforms just as much as it does Temu and Shein (especially Amazon Haul). It will also mean that if the US and China make a deal on the tariffs, Temu and Shein could be back, with a vengeance.

The current complacent 'schadenfreude' thinking that business is over for them is dangerous. Therefore, I have decided to pull the Temu Watch #7 report on Tech Buzz China from behind our regular paywall for at least a week. It discusses what the impact would be if only de minimis was cancelled and tariffs remained unchanged.

Read it for free while you can. techbuzzchina.substack.…

-Ed