Deutsche sees Amazon benefitting from possible tariffs on Temu

Deutsche Bank says multiple news sources late last week reported that President Biden intends to take executive action while waiting for Congress to pass a bill related to the de minimis provision on trade. This would likely affect how low-value goods are treated under U.S. customs laws, the analyst tells investors in a research note. As it stands today, goods valued at $800 or less can enter the country without incurring tariff costs or import duty taxes, but with de minimis package volume rapidly growing to nearly $1B over the last year, the White House is concerned about the hand that China e-commerce giants Temu and Shein have had in this growth, according to a CNBC report, Deutsche points out. The firm’s work suggests Temu is already losing between $35-$40 per order, while benefitting from the de minimis provision. Given that prices on Temu are generally 4%-10% below low-cost alternatives on Amazon, the platform’s relative pricing gap to Amazon could contract materially from tariffs, according to Deutsche. The firm sees Amazon as the “clear beneficiary” to the extent this loophole is closed and the Temu value-seeking demand fragments