By Denny Jacob

Shares of PDD Holdings, the owner of online-marketplace Temu, slipped as a series of escalating tariffs between the U.S. and China added major complications to its business.

The stock was trading down 9.6%, at $102.60, midday Friday. It has fallen about 13% over the past year.

PDD--which also owns Pinduoduo, one of China's leading retailers--will now need to steer Temu through incoming tariffs that will raise prices and potentially crimp consumer demand for its clothes, gadgets and other low-cost goods. The company has reconfigured the shopping landscape in recent years as it benefited largely from duty-free shipping.

PDD's ability to bring goods cheaply into the U.S. faces two distinct problems. President Trump on Wednesday signed an executive order eliminating the de minimis provision for low-value parcels from China, effective May 2.

Under U.S. tax law, the de minimis provision allows companies to avoid import taxes and customs inspections on international shipments with a retail value of $800 or less. Use of the provision ballooned in recent years with a flood of goods from bargain sites like Temu and rival Shein.

Tariffs, however, pose the biggest challenge. Trump kicked things off when returning to office by introducing a new set of tariffs on China; Beijing responded with their own.

The matter has since escalated as Trump issued more tariffs on China, bringing the base tariff rate on Chinese imports to 54% after April 9. China on Friday said it hit all U.S. goods with an additional 34% and will go into effect April 10.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

April 04, 2025 13:04 ET (17:04 GMT)

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