Temu’s Daily U.S. Users Drop 58% Amid De Minimis Policy Shift and Trade Tensions

In May, daily active users (DAUs) of Temu, the cross-border e-commerce platform operated by PDD Holdings $PDD, declined by 58% in the U.S., according to data from mobile analytics firm Sensor Tower. The dramatic user drop comes as the Biden administration reconfigures its approach to imports from China, directly impacting Temu’s cost structure and strategic model in one of its largest overseas markets.

Policy Shifts and Operational Headwinds

Temu’s meteoric rise in the U.S. e-commerce space was underpinned by an aggressive advertising strategy and a reliance on Section 321 de minimis exemptions, which allowed low-value packages to enter the U.S. without tariffs. However, following a May 2 policy revision by the White House aimed at tightening trade scrutiny, Chinese exporters including Temu now face elevated customs costs and increased regulatory oversight.

This structural change forced Temu to slash its U.S. advertising budget and reevaluate its fulfillment logistics — two pillars critical to its rapid market penetration. The platform’s retreat coincides with broader U.S. efforts to restrict Chinese access to American consumer data and to rebalance trade flows amidst growing geopolitical competition.

Quick Facts

• Company: Temu, operated by PDD Holdings

• Market: United States, cross-border e-commerce

• Policy Impact: End of de minimis privilege under Section 321

• User Drop: 58% decline in DAUs in May 2025 (Sensor Tower)

• Strategic Response: Advertising cuts, revised logistics strategy

Market Reactions and Industry Commentary

The immediate market response to Temu's contraction has been moderate, with PDD Holdings stock showing limited volatility, likely reflecting the firm’s diversified revenue base across China and Southeast Asia. However, analysts warn that the loss of U.S. market momentum could dent long-term revenue projections if alternative growth avenues are not realized.

Industry observers point out that the regulatory tightening on de minimis entries (shipments under $800) could create ripple effects for other China-based platforms, such as Shein and AliExpress, which similarly rely on fast, tariff-free delivery models to attract price-sensitive Western consumers.

Key Takeaways

1. Temu’s U.S. daily user count dropped by 58% following the de minimis policy rollback

2. The platform is cutting ad spend and revising order fulfillment models

3. PDD Holdings has not yet released a formal investor update on the U.S. performance

4. Trade policy changes reflect broader U.S.–China decoupling efforts

5. Similar platforms may face regulatory headwinds impacting cross-border e-commerce viability

A Defining Moment for Cross-Border Retail

The significant decline in Temu’s U.S. daily user base underscores the growing vulnerability of Chinese e-commerce platforms to shifting geopolitical tides and trade frameworks. While Temu’s parent company, PDD Holdings, maintains a solid foothold in domestic and regional markets, the loss of momentum in the U.S. could reshape its global ambitions. The tightening of de minimis exemptions marks a decisive moment in the U.S.–China trade war, with broader implications for international digital commerce models dependent on low-cost, cross-border logistics.