By Joe Wallace

These are tricky times for PDD, the Chinese company behind the low-cost online shopping platform Temu.

PDD's Nasdaq-listed shares dropped Wednesday, and had been even lower in premarket trading.

A day after saying it would stop accepting parcels from China and Hong Kong, the U.S. Postal Service on Wednesday reversed its decision. The zig-zag comes after President Trump moved to close a loophole that let companies avoid tariffs on packages sent directly to U.S. consumers and worth less than $800.

So-called de minimis shipments have become wildly popular in recent years, fueled partly by the growth of Chinese ecommerce company Temu and Shein, its China-founded, Singapore-based rival. Many sellers on Amazon have also used the system.

Higher tariffs and the closure of the small-package carveout could also have implications for Shein's initial public offering, one of the most hotly anticipated stock-market debuts of recent years. Shein's biggest market is the U.S.

Tensions between the U.S. and China, particularly over Chinese cotton, spiked Shein's plan to list in New York. Shein pivoted to London, filing a confidential listing application last June. The firm is waiting for approval from U.K. and Chinese regulators.

Attracting Shein would give the City of London something to cheer after years of near-silence in its IPO market. But Shein continues to face political scrutiny: A U.K. parliamentary committee recently questioned its openness about the source of cotton in its garments.

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(END) Dow Jones Newswires

February 05, 2025 11:21 ET (16:21 GMT)

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