Trump’s Tariff on Cheap Chinese Imports Will Cost Big Tech Billions

The expansion of the loophole for tariff-free shipments of goods nearly a decade ago gave rise to Temu, Shein and other low-cost online retailers offering items straight from Chinese factories at unfathomable discounts.

It also unleashed something else — a cascade of billions of dollars of digital advertising that provided a windfall for Meta, Alphabet and other technology industry giants. Temu and Shein, jockeying for the attention of American shoppers, blanketed seemingly every inch of the internet with their ads. In the last two years, only Amazon spent more on online advertising in the United States than Shein or Temu.

Now, the advertising bonanza might be coming to an end after the demise of the shipping loophole that spurred it.

On Friday, President Trump eliminated the exemption that had allowed goods made in mainland China and Hong Kong valued at less than $800 to enter the United States without being subject to import taxes. For Temu and Shein, this means they are now subject to tariffs of as much as 145 percent to bring over Chinese goods. Last week, Temu started adding “import charges” to certain products, which more than doubled the overall price to buy and ship the items.

A Temu spokesperson said on Friday that the company had stopped shipping products from China directly to customers in the United States, and that its U.S. orders would now be shipped from local warehouses in America, as the business “transitions to a local fulfillment model.” Shein did not immediately respond to an email requesting comment.

The new tariffs are expected to deal a punishing blow to companies built on selling goods at rock-bottom prices and attracting customers through aggressive online advertising.