Trade tensions hit Temu: Profits plunge amid tariff shifts
The owner of the Chinese online store Temu, PDD Holdings, reported a 47% drop in profits in the first quarter of 2025, according to the BBC. The company's president, Chen Lei, stated that this is a result of the trade policy pursued by U.S. President Donald Trump.
Shares of Temu, one of the leading e-commerce companies listed on the American stock exchange, fell by over 13% this week when the company announced that its profits in the first three months of the year decreased to 14.74 billion yuan (approximately $2 billion CAD).
PDD Holdings' president stated that the trade war between the United States and China "exerted significant pressure on buyers." In his opinion, the decline in profit was caused, among other things, by changes in tariff rates.
End of tariff exemptions
Before the Trump administration announced the new tariff policy, Temu and other Chinese sales platforms, such as Shein, benefited from tariff exemptions.
This allowed the sale and shipment of low-value goods to the USA without the necessity of paying import taxes.
