PDD Holdings‘ PDD Temu app has once again secured the top position as the most downloaded free app on Apple’s U.S. iOS store, marking its second consecutive year at the summit.
What Happened: This achievement comes amid increasing scrutiny of Chinese companies by U.S. authorities, CNBC reported on Tuesday.
The Biden administration is proposing measures to address the “overuse and abuse” of the de minimis provision, which allows duty-free imports for shipments under $800. This could affect Temu and other companies like Shein by potentially raising costs and reducing their competitive edge.
Additionally, President-elect Donald Trump has suggested tariffs of 60% to 100% on Chinese imports, though it’s uncertain if these will be enacted. This aligns with his campaign’s focus on limiting Chinese imports. Meanwhile, countries like Vietnam and Indonesia have already taken action against Chinese imports, with Vietnam banning Temu shortly after its launch there. A report from Nomura indicates that changes to the de minimis rule could significantly impact China’s export growth to the U.S. in 2025.
Why It Matters: The proposed changes to the de minimis exemption are part of a broader effort by the Biden administration to curb the influx of low-value goods from Chinese e-commerce platforms like PDD Holdings and Shein. The Biden-Harris Administration has expressed concerns over the increased abuse of this loophole, which has seen shipments claiming this exemption surge from about 140 million to over a billion annually.
The potential tariffs proposed by President-elect Trump could further complicate the landscape for Chinese imports. As noted by JPMorgan analyst Christopher Horvers, these tariffs could be more challenging to absorb now than during the previous trade tensions in 2019, given the current economic conditions.
Moreover, PDD Holdings recently reported a fiscal third-quarter revenue growth of 44% year-on-year, but missed analyst expectations, highlighting the intensified competition and external challenges faced by the company.
Price Action: PDD closed 2.60% lower at $99.61 on Monday while it was up by 0.58% and trading at $100.17 at 7:28 am ET, as per Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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