Temu’s ‘import surcharges’ fuel outrage, leaving it more susceptible to tariff backlash than Shein

Both companies, which built their U.S. empires on ultra-cheap goods sourced from China, enacted broad price increases on April 25 as the Trump administration moves to close the de minimis loophole — which exempted shipments under $800 from duties — and impose a steep 145% tariffs on many imports from China.

A dress for sale on Shein and reviewed by Modern Retail had a $22.19 price tag on Thursday before the company’s price increases went into effect. By Friday, the same dress was priced at  $26.49, a 19% increase. A separate analysis conducted by Glossy found that Shein products before and after the price hike showed some goods increasing in cost by as much as 90%. 

Similarly, a vacuum cleaner listed on Temu that cost $10.77 on Thursday rose to $16.93, a 57% increase, according to Juozas Kaziukėnas, founder of Marketplace Pulse​. On top of higher prices, Temu has gone a step further, adding an “import surcharge” at checkout that is already sparking backlash among its cost-conscious customers. In the case of the vacuum cleaner, which Kaziukėnas flagged on LinkedIn, Temu tacked on a $21.68 tariff surcharge. 

Now, the big question is how much these price hikes will dent sales. Analysts and industry experts told Modern Retail that Temu’s heavy reliance on rock-bottom prices may leave it more vulnerable to shopper defections. Plus, adding a surprise surcharge at checkout on top of already increased prices could push customers away. Meanwhile, Shein — which competes more directly with fast-fashion brands — may be better positioned to withstand the pressure. 

‘No more Temu for me’

Under a new executive order taking effect May 2, the U.S. will end duty-free treatment for individual packages worth less than $800 arriving from China and Hong Kong. The administration has also signaled plans to extend the change to shipments from other countries, though it has not yet announced a timeline.

Temu’s addition of an import charge at checkout — rather than just baking tariffs into listed prices — creates a jarring experience for shoppers. “Once you click ‘checkout,’ all of a sudden, the price more than doubles,” Kaziukėnas said. “It’s quite likely most people will just abandon the cart.”

More brands and retailers have been adding surcharges at checkout in response to tariffs, but “getting a surcharge at checkout can certainly come as a shock to consumers and can lead to abandoned carts when they weren’t expecting it,” Sky Canaves, a retail analyst at eMarketer​, previously told Modern Retail. 

On Reddit’s TemuThings forum, shoppers are already voicing their frustrations. “No more Temu for me,” wrote one poster, who was slapped with a $44.60 import charge on a $30.15 order, which ultimately pushed the total price to $76.56. “This is so much worse than I expected,” the user concluded. Another Reddit user posted a screenshot of a Temu receipt with a $41.24 import charge on a $27.97 order. In general, the Temu subreddit is littered with complaints from U.S. customers. 

The import surcharge only applies to products that aren’t shipped from local U.S. warehouses, according to a disclaimer on Temu’s website that says, “No import charges for all local warehouse items and no extra charges upon delivery.”

By contrast, there is a noticeable lack of complaints from Shein customers in a similar Reddit forum. 

Shein’s core competition lies with fast-fashion players like H&M and Zara, which have higher baseline prices. “Shein has a huge following, is a super recognizable brand and has a lot more stickiness than something like Temu or AliExpress,” said Kaziukėnas​. “Temu might be hit harder by these price increases than Shein.”

Kaziukėnas​ isn’t alone. 

“Since Shein is in the fashion industry and offers significantly lower prices than its competitors, it likely has more flexibility with margins,” said Izzy Rosenzweig, founder of Portless, a cross-border logistics startup​.

Indeed, while Shein shoppers cite price as their top concern — 80% say it’s the most important factor when choosing a clothing retailer, per Harris Poll data — Shein’s small dollar increases may not be enough to drive them away. A $21 dress that now costs $24 is still competitive compared to mall retailers.

While some Shein products have surged in price by as much as 377%, the increases aren’t uniform across the site. According to a Bloomberg analysis, the top 100 products in the beauty and health category on Shein rose about 51% on average, while prices for the most popular women’s clothing items climbed a more modest 8%.

Temu did not immediately respond to a request for comment regarding the import surcharge. CNBC earlier reported on Temu’s import surcharge.

What’s next for Temu and Shein

Once seen as a major disruptor to U.S. discount retailers, Temu’s customer overlap with Five Below and Ollie’s Bargain Outlet has been declining since mid-2024​. “It suggests that Temu is falling out of favor with some of these retailers’ customers,” said Michael Maloof, head of marketing at Earnest Analytics, previously told Modern Retail. 

Temu’s reliance on extreme bargains also means that even small price increases — or unpleasant checkout surprises — can hurt conversion. “The more expensive items get, they lose that ability,” Kaziukėnas said​.

Shein and Temu have both tried to mitigate the impact by building up U.S. inventory and exploring local production options​. Shein has also encouraged suppliers to set up facilities in Vietnam earlier this year​, per Bloomberg.

Retailers like Walmart, Target and Five Below could also benefit from Temu’s stumble. Walmart, in particular, has bulked up its marketplace to offer many of the same low-cost goods Temu sells — but with faster shipping and easier returns. Over a quarter of U.S. consumers say they’ll switch to U.S.-made alternatives in response to tariffs, according to February 2025 data from Numerator.

Despite the turbulence, neither Shein nor Temu are likely to disappear.

“Shein listens to consumers on TikTok, figures out what they want to wear, makes it that week and sells everything they make,” Rosenzweig said. “Shein’s success is not just because they’re dodging tariffs. It’s also because they’re able to experiment with new styles and get them to market quickly.”

But for Temu, the road may be rougher. As Rosenzweig put it, “Temu is competing more directly with dollar stores, so it may not have the same pricing buffer.”