(qlmbusinessnews.com . Fri 29th May, 2025) London, UK —
Temu Owner PDD Holdings Sees Profits Plunge 47% Amid Trump Tariffs
PDD Holdings, the Chinese parent company of online retail giant Temu, has reported a near 50% plunge in profits, as escalating trade tensions between the United States and China continue to take their toll on Chinese exporters.
Shares in the Nasdaq-listed e-commerce firm slumped by over 13% on Tuesday after the company revealed its profits for the first quarter had dropped to 14.74 billion yuan (£1.5 billion), down 47% compared to the same period last year.
The decline comes in the wake of fresh trade restrictions introduced by the Trump administration, which has revoked the long-standing “de minimis” exemption. Previously, this rule had allowed packages valued under $800 (£630) to enter the US without incurring import duties — a loophole heavily used by Chinese retailers like Temu and Shein.
As of May, these low-cost parcels are now subject to tariffs of up to 120%, prompting Temu to halt direct shipments from China to the US. However, a recent softening in trade relations saw the tariff rate temporarily halved for a 90-day period.
In a statement, PDD Holdings chairman Chen Lei described the policy shift as a “radical change in the external policy environment,” citing tariff pressures as a key reason behind the earnings dip. He added that the US-China trade war had placed “significant strain” on merchants using the platform.
Domestically, PDD continues to battle a fierce price war with rivals Alibaba and JD.com, as Chinese consumer spending remains sluggish.
The retail shake-up isn’t limited to the United States. The European Union has proposed a €2 flat fee on cross-border parcels entering the bloc, affecting millions of items sold via online marketplaces. Meanwhile, in the UK, Chancellor Rachel Reeves has signalled a review of the current customs framework for low-value imports following concerns raised by domestic retailers.
With multiple regulatory hurdles emerging across global markets, Temu and other low-cost e-commerce firms face an increasingly uncertain future.
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