As former U.S. President Donald Trump pushes forward with plans for sweeping import tariffs—including a universal 10% tax on all goods and up to 60% on Chinese products—the pressure is mounting on Chinese e-commerce giants Temu and Alibaba. Built on the backbone of ultra-low prices and fast delivery, these platforms may now find their U.S. growth story facing serious disruption.
The Business Model at Risk
Temu, the discount e-commerce app owned by Chinese tech giant Pinduoduo, exploded onto the U.S. scene by offering household goods, fashion, and gadgets at prices often 30–70% lower than those on Amazon or Walmart. Similarly, Alibaba’s AliExpress has long served American customers with direct-from-China shopping options, relying heavily on low labour costs and cheap shipping.
Both companies have benefited enormously from the “de minimis” import rule, which allows products valued under $800 to enter the United States without paying tariffs or undergoing the same customs scrutiny as bulk shipments. This loophole has given Chinese platforms an unfair price advantage in the eyes of U.S. retailers and manufacturers.
Trump’s Tariff Threat: A Game Changer
If enacted, Trump’s proposed tariff measures would dismantle the pricing edge Temu and Alibaba currently enjoy. Analysts predict that applying a blanket 10–60% tax on incoming Chinese packages—especially on low-value items—could cause Temu’s turnover to shrink by as much as 40% within the first year.
For Alibaba, the blow may be less dramatic due to its broader B2B and wholesale operations, but its AliExpress division is expected to take a serious hit in its U.S. consumer sales.
American Retailers Quietly Applauding
While Chinese platforms face this looming challenge, American retailers like Walmart, Target, and Kroger may stand to benefit. Many of them have long argued that Chinese e-commerce sellers operate on an uneven playing field, avoiding taxes, product safety standards, and labour regulations that domestic retailers must follow.
“There’s a strong sentiment building across U.S. retail that the de minimis system needs reform,” says one senior executive at a large supermarket chain. “Platforms like Temu undercut prices by bypassing the rules the rest of us have to follow.”
Can Chinese Platforms Adapt?
Temu and Alibaba will likely try to offset tariffs through alternative shipping routes, sourcing from other Asian nations like Vietnam, Thailand, or Indonesia, or even exploring transshipment via Mexico. But these moves come with complications, including customs crackdowns, higher logistics costs, and complex compliance hurdles.
Moreover, the days of frictionless e-commerce from Chinese warehouses directly to American doorsteps may soon be over. The digital commerce landscape is shifting from a “race to the bottom” on price, to one where compliance, transparency, and local resilience matter more than ever.
The Bigger Picture
The tariff issue is not just a matter of trade—it’s a battleground for the future of global e-commerce. If Chinese platforms lose their cost advantage, American and European companies may regain some lost ground. At the same time, this could open doors for manufacturing hubs in North Africa, Mexico, and Southeast Asia, as retailers scramble to diversify their supply chains.
In the end, the consumer will decide. Will Americans pay more for goods sourced closer to home, or will price still reign supreme?
2025 could be the year that answers that question.