Temu and Shein Are Cutting Ad Spend - The Hidden Impact on Your Campaigns

Temu and Shein—two dominant forces in U.S. e-commerce ad spend—are hitting the brakes. According to Reuters , both brands are cutting back sharply on U.S. digital advertising in anticipation of steep tariffs on Chinese imports. A major shift in U.S. trade policy, effective May 2, removes the ‘de minimis’ exemption for goods valued under $800—a loophole that previously let low-cost retailers avoid duties entirely.

What’s Changing With U.S. Trade Policy?

For the first time, tariffs of up to 145% will apply to many direct-from-China shipments. This dramatically raises the cost of importing low-value goods, forcing companies like Temu and Shein to rework their pricing and logistics strategies. Per Reuters, the price hikes may begin as early as April 25.

How Big Are the Ad Cuts?

Data from Sensor Tower confirms a steep drop in spending over a two-week period:

• Temu: U.S. ad spend down 31%
• Shein: Cut ad budgets by 19%

This isn’t tactical trimming—it’s a hard pivot. Both companies were among the biggest digital ad buyers in the U.S., often bidding aggressively across Meta, Google, TikTok, and YouTube. Their pullback signals more than a line-item cut—it’s a shift in growth strategy.

What Happens to Ad Auctions Now?

Less Chinese e-commerce spend = softer auction pressure, short-term. With major players withdrawing budget, CPMs (cost per thousand impressions) on key ad platforms may briefly dip. That’s good news (temporarily) for other advertisers. But don’t expect a lasting drop. Market voids like this tend to fill quickly with:

• Emerging global DTC brands
• Legacy retailers adapting digital-first strategies
• Agile media buyers increasing spend opportunistically

Rethinking Fragile Growth Tactics

If your brand relies on loopholes, subsidies, or ultra-low pricing—it’s time to recalibrate. This shake-up highlights how fragile some digital growth tactics are. Brands must now ask:

• Are your acquisition costs sustainable without subsidies?
• Is your pricing rooted in value, or just scale?
• Can your funnel survive without deep discounting?

Opportunity: A Breather for Value-Driven Brands

With fewer cheap imports dominating ad space, real-value brands get a shot at visibility. Consumers scrolling feeds might see fewer one-dollar dresses and more authentic, trust-building messages. This creates breathing room for brands that focus on:

• Product quality and design
• Customer trust and loyalty
• Sustainable acquisition strategies

Bottom Line

Temu and Shein’s retreat is more than a blip—it’s a shift in global commerce strategy. For marketers, this is a moment to double down on fundamentals: value, differentiation, and durable strategy. Chasing short-term CPM dips is tempting—but building resilience is smarter.