Temu saw a 58% drop in daily active users in the U.S. in May, according to Sensor Tower data. The decline follows the Trump administration’s May 2 decision to end the de minimis exemption, which allowed low-value shipments from China to enter the U.S. duty-free. In response, Temu cut U.S. ad spending and shifted its fulfillment model. Previously, merchants handled orders while Temu managed logistics. Now, sellers must ship to Temu’s U.S. warehouses and handle customs and tariffs. The end of the exemption hit Temu harder than rival Shein. PDD Holdings Incorporated’s Q1 earnings fell short of expectations. Despite U.S. setbacks, HSBC analysts noted 90% of Temu’s 405 million global monthly users now come from outside the U.S.