A logistics center for Temu owner PDD Holdings in Guangdong Province, China, on April 8. Photo: Qilai Shen/Bloomberg via Getty Images
Shares in Temu's parent company plunged nearly 14% in the U.S. today after the company signaled deep-seated challenges from Trump's trade war.
✂️ PDD Holdings reported a slight rise in Q1 revenue to the equivalent of around $13.3 billion, but a nearly 50% drop in net profit to $2 billion.
⚠️ Both numbers fell well short of expectations from S&P Global Market Intelligence.
Between the lines: PDD co-CEO Lei Chen said on an earnings call that the company will need to "invest decisively to support consumers and merchants."
"This effort will likely weigh on our profitability in the short term and even for a considerable period of time to come," Chen said.
📦 The big picture: The White House closed the "de minimis" loophole on low-value imports, exposing shipments from the likes of Temu and Shein to a sudden spike in costs.
The bottom line: There's no easy workaround for cheap product importers.
