TikTok Shop sales slump as US imposes high Chinese tariffs

Sales on TikTok Shop in the United States have declined following the introduction of new tariffs on Chinese imports.

Gross merchandise volume (GMV) fell to US$197.4 million last week, down from US$250.9 million the previous week, according to data from EchoTik, a third-party tracking site.

The US government announced tariffs that could reach up to 245% on Chinese exports in response to Beijing’s actions.

This measure is expected to significantly affect trade between the US and China, the world’s two largest economies.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ The end of de minimis exemption targets the core business model of Chinese fast-fashion platforms

TikTok Shop’s declining sales from $290.8 million in late March to $197.4 million recently coincides with the announcement of major tariff changes.

The success of platforms like TikTok Shop, Shein, and Temu has been largely built upon the de minimis exemption, which allowed goods valued under $800 to enter the US duty-free 1.

President Trump’s April 2nd Executive Order eliminates this exemption for Chinese goods starting May 2, 2025, fundamentally changing the economics that made these platforms competitive 2.

The immediate consumer reaction shows how price-sensitive these platforms’ customer bases are, with merchants like Qian Liu already halting US operations, stating, “If we pay tariffs accordingly, we won’t make any profit.”

The new tariffs, reaching up to 245% on some Chinese exports, make the direct-from-China shipping model that these platforms rely on potentially unsustainable for many product categories.

This represents a structural challenge to the entire fast-fashion e-commerce ecosystem rather than a temporary market fluctuation, as these platforms previously operated on razor-thin margins dependent on duty-free status.

2️⃣ Cross-border e-commerce disruption accelerates supply chain diversification beyond China

The rapid decline in TikTok Shop’s GMV demonstrates how swiftly trade policy changes can impact digital retail operations reliant on cross-border shipping.

Previous US-China tariff situations have consistently led companies to relocate manufacturing to countries like Vietnam and Thailand to maintain competitive pricing 3.