Temu is still operating, but it has been hit with tariffs, user losses, and growing legal and regulatory pressure in 2025.
Business changes
Temu’s hyper‑growth in the U.S. stalled as daily and weekly app usage dropped sharply and sales growth turned negative in 2025. Reports citing app analytics firms describe U.S. daily users falling by more than half and user engagement and new downloads declining significantly.
To cope with rising costs and policy changes, Temu stopped shipping products directly from China to U.S. buyers and shifted to fulfilling orders from U.S.-based warehouses and third‑party sellers. This followed the closing of a de minimis tariff loophole and new import tariffs on low‑value Chinese goods, which undermined Temu’s ultra‑low‑price model.
Government tariffs and rules
The Trump administration closed the under‑$800 duty‑free loophole for many China‑origin parcels and imposed higher tariffs, directly impacting Temu’s ability to ship cheap items from China into the U.S. market. After this, Temu confirmed that U.S. orders would be sent from domestic warehouses instead of being mailed from China.
These changes increased Temu’s costs, forced price hikes, and reduced its competitive edge versus domestic platforms, contributing to a drop in U.S. customers and order volumes.
Legal and regulatory issues
Several U.S. states have sued Temu and its parent PDD Holdings over allegations that the app harvests excessive user data and misleads consumers about product quality and privacy. One recent lawsuit alleges that Temu’s app can access highly sensitive information (like location and app lists) and that this creates major consumer‑protection and privacy concerns.
In Europe, EU authorities carried out surprise inspections at Temu’s European headquarters in Dublin over concerns the company may have benefited from prohibited Chinese state subsidies, and regulators are also scrutinizing how the platform handles illegal products and consumer safety.
Net result
Temu has not “disappeared,” but its situation is much weaker than at its peak: it is losing users, facing higher costs and tariffs, and under investigation or litigation in both the U.S. and EU. The company appears to be in a defensive phase, cutting ad spend, changing logistics, and responding to regulatory and legal challenges rather than aggressively expanding as it did before.
