Temu Owner PDD Sees Profits Plunge Amid Trump Trade Clampdown.
PDD Holdings, the Chinese parent company of fast-growing online marketplace Temu, has reported a dramatic 47% plunge in first-quarter profits, citing mounting trade tensions with the United States and fierce competition at home.
The company’s US-listed shares tumbled more than 13% on Tuesday after it revealed profits had fallen to 14.74 billion yuan ($2.05 billion, £1.5 billion). PDD Chairman Chen Lei attributed the steep decline to external challenges: “a radical change in external policy environments such as tariffs.” He also warned that the US-China trade war had “created significant pressure for our merchants.”
Temu, along with fellow Chinese e-commerce giant Shein, had long benefited from the U.S. “de minimis” rule — an exemption that allowed parcels under $800 in value to enter the country duty-free. However, the Trump administration revoked that benefit in early May, slapping Chinese shipments with tariffs as high as 120%. The move dealt a heavy blow to China’s low-cost retail exporters.
RELATED: Trump's Tariffs Set to Hit the Economy: Inflation, Job Losses, and Slow Growth Ahead.
In response, Temu announced it would cease direct shipments from China to American consumers. Though a brief easing in trade tensions saw tariffs on small packages reduced by more than half for a 90-day period, uncertainty remains high.
At the same time, PDD faces domestic headwinds. It has been engaged in a prolonged price war with competitors Alibaba and JD.com, in an environment already weakened by sluggish consumer demand in China.
PDD’s troubles extend beyond the US. In Europe, the EU has proposed a flat two-euro customs fee on small parcels entering the bloc, targeting e-commerce platforms like Temu. In the UK, Chancellor Rachel Reeves recently pledged to review how low-value imports are treated, following backlash from local retailers concerned about unfair competition.
The combination of these pressures—international tariffs, domestic rivalry, and growing regulatory scrutiny abroad—is beginning to choke growth for Temu and its parent company.
While these companies are battling to adapt, it’s clear that former President Donald Trump's aggressive trade policies continue to sow economic disruption on both sides of the Pacific. His actions have not only strained global trade relations but also destabilized key markets, punishing consumers and businesses alike under the guise of economic nationalism.
