How do you respond to threats rates?

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The recent tariff threats of the Trump Administration have increased uncertainty about Temu’s business model and other large electronic commerce groups. The White House invested its initial closure in 2025 of A escape That allowed low value plots to be sent from China to enter the US. UU. With a minimum fuss and without import taxes. But the risk of a permanent movement persists.

The opinion is divided over the resulting threat to the business. The FT Lex column He argued: “The Chinese online store does not need tax peculiarity to be a great threat to brick and mortar retailers.”

However, for the economist, “many American consumers have been willing to overlook the quality of Shein and Temu’s products because they are very cheap. This will change when rates and other customs rates are added, which in some cases will double prices for consumers. ”

What evaluation is more convincing? Temu is owned by PDD Holdings, a Chinese company. Temu operates an online B2C platform that went to the United States in September 2022. International expansion has been rapid: by 2024, it was operating in almost 80 countries. The annual income was My dear At $ 50 billion, an increase of three times more than 2023.

Most descriptions of the Temu business model emphasize their ability to take advantage of the lowest labor costs in China to make millions of domestic products available to customers abroad. Temu sells products made by companies that do not have internationally recognized brands. While reports vary, it has been discovered that TeMU has prices of up to 80 % lower than rival electronic commerce platforms and still offer free shipments and returns.

The deceleration of growth in Chinese consumption has forced country manufacturers to look for in other markets for their existing capacity, selling closer to marginal costs. Temu has been well located to capitalize on this situation.

For 2024, long before President Trump’s most recent movement, Temu would have collected the signals of the officials in Washington and Brussels that low -cost imports would be subject to toughest import regimes. Adverse policy movements are not limited to Western economies. Indonesia was early moverimposing restrictions on foreign electronic commerce platforms in September 2023.

However, changes in policies have been promulgated and implemented for some time. Sometimes, changes in the discussed commercial policy do not occur at all and, even if they do, restrictive measures can be reversed after a violent reaction of those clients who have been harmed. Dozens of millions of Americans and Europeans use the application of TEMU.

Practical considerations are also entrusing. At the moment, American customs officials simply do not have the ability to process additional paperwork. These considerations are considered as companies evaluate their exposure to greater protectionism. Temu took them into account in a series of fast answers:

• An international sales diversification impulse to reduce the dependence of the US market to less than half of global income

• The supply of products sold in the US market from non -Chinese locations

• Offering to sell on its platform the products of other companies, which retain the responsibility of sending their products to the United States

• Warehouse configuration in the US

These movements highlight the various degrees of freedom available for electronic commerce platforms operating internationally. Commercial tensions and commercial wars tend to be bilateral or confined to a small number of countries. With more than 200 customs territories worldwide, Temu has many options to reconfigure its commercial footprint and operations.

But are the movements described above enough to ensure that the company continues to thrive? And what costs, explicit and hidden, are they involved? Since the competition is always relative, the relative strengths of other electronic commerce platforms, brick and mortar retailers and companies that reach customers through an omnichannel strategy, which provides a perfect experience in Websites, applications, social networks and other channels.

Since the commercial models of electronic commerce have a “winner approach it takes everything”, could I have already grown so great that it can take protectionism in its path?

Carlos Cordon is professor of strategy and management chain at IMD. Simon J. Evenett is a professor of geopolitics and strategy at IMD and co -president of the Global Future Council of the World Economic Forum on Commerce and Investment.