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.

In a significant policy shift aimed at alleviating financial pressure on sellers, Chinese authorities have requested e-commerce platform operators to cease the practice of requiring sellers to issue refunds without the return of goods. This decision is expected to be implemented by July and highlights the government’s effort to support merchants during challenging economic conditions. Key players involved in this policy revision include PDD Holdings $PDD and JD.com $9618.HK.