Chinese online retail giants Shein and Temu have warned US customers that goods will get pricier from next week, after President Donald Trump imposed hefty tariffs on goods from China. In almost identical statements, the rival companies said they have seen operating expenses rise "due to recent changes in global trade rules and tariffs", adding they will make "price adjustments" from 25 April. The shopping sites have gained tens of millions of customers in the US, attracted by their ultra-low prices. Their popularity has put pressure on Amazon, prompting it to launch a new platform called Haul last November, featuring items for under $20 (£15.10). Since returning to the White House in January, Trump has imposed taxes of up to 145% on imports from China. His administration said this week that when the new tariffs are added on to existing ones the levies on some Chinese goods could reach 245%. Trump has also ended a duty-free exemption for goods worth less than $800, which helped Shein and Temu make rapid inroads to the US market. US lawmakers on both sides had raised concerns about how these companies had"exploited" the provision. An estimated 1.4 billion packages entered the US under this arrangement last year, up from 140 million in 2013, according to US customs authorities. Since Trump started imposing the tariffs, Shein and Temu have seen the ranking of their apps fall sharply. Temu is now the 75th most downloaded free app on the US Apple Store, after having consistently taken one of the top five spots in the last two years. Shein is in 58th place, down from number 15 last month. But other Chinese retail apps continue to be ranked highly in the US, including DHgate in second place and Alibaba's Taobao at number seven. Shein and Temu have also slashed their advertising spending in the US. Temu has "turned off all their Google Shopping ads in the US" as of 9 April, Mike Ryan, head of e-commerce insights at online advertising agency Smarter Ecommerce, said on LinkedIn. Temu's average daily US advertising spend on social media platforms include Facebook, Instagram and YouTube fell by 31% in the two weeks leading to 13 April, compared with the past month. Shein's average daily US ad spend fell by 19% over the same period, according to data from market intelligence firm Sensor Tower. In their statements, Temu and Shein encouraged customers to shop before higher prices kick in. "We stand ready to make sure your orders arrive smoothly during this time. "We're doing everything we can to keep prices low and minimize the impact on you. Our team is working hard to improve your shopping experience," the statements said. Temu and Shein did not immediately respond to requests from the BBC for further comment.
Shein and Temu warn tariffs will raise prices in US
TruthLens AI Suggested Headline:
"Shein and Temu Announce Price Increases Due to New US Tariffs"
Bbc News
7.3
TruthLens AI Summary
Chinese online retail giants Shein and Temu have announced to their US customers that prices for their products will increase starting April 25, following the recent imposition of significant tariffs on Chinese goods by President Donald Trump. In nearly identical statements, both companies cited rising operating expenses due to changes in global trade rules and tariffs as the reason for the upcoming price adjustments. The increased costs come as Shein and Temu have gained popularity in the US market, attracting millions of customers with their low-priced offerings. Their rapid growth has intensified competition for established retailers like Amazon, which recently launched a new platform called Haul to feature affordable items. The Trump administration has implemented tariffs as high as 145% on imports from China, with the potential for some goods to face levies reaching 245%. The administration also revoked a duty-free exemption for goods valued under $800, a provision that had previously facilitated Shein and Temu's market penetration in the US, leading to concerns from lawmakers about the exploitation of this exemption.
The impact of these tariffs is already being felt, as both Shein and Temu have experienced a decline in their app rankings in the US, with Temu dropping to 75th place from a consistent top five position over the past two years, while Shein fell to 58th from 15th. Additionally, both companies have reduced their advertising expenditures in the US significantly; for instance, Temu halted all Google Shopping ads earlier this month and saw a 31% decrease in its average daily spending on social media platforms. Shein's average daily ad spending also fell by 19% during the same period. Despite the challenges posed by the new tariffs, both companies have urged customers to make purchases before the price increases take effect, assuring them of their commitment to maintaining a smooth shopping experience. They emphasized their efforts to keep prices low and minimize the impact of these changes on their customers, although they did not provide further comments when approached by the media.
TruthLens AI Analysis
The article highlights the significant impact of newly imposed tariffs on Chinese goods, particularly affecting online retailers Shein and Temu. These companies are warning their US customers about impending price increases due to the escalating trade tensions and financial policies enacted by President Trump. The backdrop of this news is a broader narrative about US-China trade relations and the competitive landscape of the e-commerce market in the US.
Implications of Tariffs on Prices
The tariffs imposed by the Trump administration, reaching as high as 245% on certain goods, are a crucial factor in the price adjustments mentioned by Shein and Temu. This serves to illustrate the direct correlation between government policies and consumer prices. By communicating the need for price hikes, the companies aim to prepare their consumer base for potential backlash against them rather than the government.
Public Perception and Sentiment
The article is likely aimed at shaping public sentiment regarding the changes in pricing. It presents Shein and Temu not merely as victims of the new tariffs but also highlights their previous advantage under the duty-free exemption, which had been a point of contention among US lawmakers. This narrative may evoke sympathy for the companies while simultaneously stirring concerns about the broader implications of these tariffs on consumer goods.
Concealed Information
While the article discusses the operational challenges faced by these companies, it does not delve deeply into the specifics of how these tariffs could affect other sectors of the economy or how alternative retailers might respond to the price changes. This omission may be a strategic choice to focus the reader's attention solely on the immediate impact on Shein and Temu.
Manipulability Factor
Considering the framing of the article, it can be seen as moderately manipulative. By emphasizing the companies' warnings about price increases, it may instill a sense of urgency and concern among consumers. The language used does not outright blame the companies for the price hikes but rather positions them as responding to government actions, which might mitigate any negative backlash against them.
Trustworthiness of the Report
The article appears to be grounded in factual reporting, citing specific actions taken by the Trump administration and the subsequent effects on these companies. However, it could benefit from a more comprehensive view of the economic landscape, including potential benefits of tariffs for certain domestic industries.
Connections with Other News
This news piece correlates with ongoing discussions surrounding US-China trade relations and the impact of tariffs on consumer goods. It fits into a larger narrative about the shifting dynamics of global trade and the competitive pressures faced by domestic and foreign retailers.
Potential Socio-Economic Effects
The announcement may lead to broader economic implications, such as increased consumer prices and a possible shift in purchasing behavior. If Shein and Temu's pricing becomes less competitive, consumers might turn to alternative retailers, thereby changing market dynamics.
Audience Targeting
This report seems to cater to consumers who are familiar with online shopping, particularly younger demographics that favor low-cost options. It may also resonate with individuals concerned about the economic implications of government policy on everyday goods.
Market Impact
This news could influence stock prices, particularly for companies involved in e-commerce, logistics, and retail. Investors might react to the anticipated drop in consumer spending and the potential rise in prices, affecting valuations of companies like Amazon, which is already feeling the pressure from the popularity of Shein and Temu.
Global Power Dynamics
From a geopolitical perspective, the article touches on the ongoing tensions between the US and China, reflecting broader issues of economic interdependence and competition. The tariffs are emblematic of a more significant shift in trade policies that may have long-term ramifications for international relations.
AI Involvement in Writing
It is possible that AI was used in crafting this report, particularly in the structuring and presentation of information. An AI model could assist in analyzing trends and consumer sentiment, potentially influencing the tone and focus of the article to align with current market narratives.
Conclusion
In conclusion, the article offers a snapshot of the complexities surrounding trade tariffs and their immediate impact on consumer prices. While it presents factual information, the framing and selective emphasis suggest an underlying goal of managing public perception, especially regarding the actions of Shein and Temu in response to government policy.