Daily U.S. users of PDD Holdings’ global discount e-commerce platform Temu fell by 58% in May, according to market intelligence firm Sensor Tower, one of many headwinds the e-retailer is facing amid a U.S.-China trade war. Temu decided to slash ad spending in the U.S. and shift its order fulfilment strategy after the White House on May 2 ended the practice known as “de minimis” – which allowed Chinese companies to ship low-value packages to the United States tariff-free. Tariffs forced both Temu and Shein to raise prices, but Shein has been able to increase the amount of money spent per customer compared to a year ago, while Temu has struggled. Engagement on Temu has dropped significantly following the end of the exemption, Morgan Stanley equity analyst Simeon Gutman said. “While the tariff environment is uncertain, if the status quo remains for an extended period, we believe Temu’s competitive threat will continue to weaken,” Gutman said. Temu continues to handle fulfilling orders close to shoppers, setting prices and online operations., HSBC said that Temu’s growth in non-U.S. markets has picked up, with non-U.S. users rising to 90% of its 405 million global monthly active users in the second quarter. “New user uptick grew swiftest in less affluent markets,” analysts wrote.