Trump's trade war led Amazon's low-cost Asian rivals Temu, Shein into retreat, but it may be temporary

President Trump intensified his trade war this week with new tariffs outlined in letters sent to Japan, South Korea, Malaysia, the Philippines, Laos, Myanmar, Cambodia and Thailand, among other nations

Trump has targeted Asian low-cost retailers Temu and Shein with taxes on low-volume international shipping, but given the higher prices expected across all goods, they may still have a strategy to succeed, retail experts say

Jade Gao | Afp | Getty ImagesAs President Donald Trump intensifies his trade war to stack up tariffs on many Asian countries that duce the goods that consumers in the U

Rely on, low-cost Asian retail upstarts Temu and Shein may yet find a way back to big success in the U

The Asian rivals to Amazon were directly targeted by Trump in the removal of the tax-exempt on low-volume shipments from overseas, the so-called de minimis tax

In May, Temu temporarily stopped shipping from China to the U

But as the trade war hits all the goods manufacturers across Asia, some retail experts say Temu and Shein may ultimately prevail with models designed to eke out margins in a tough environment. "The trade wars can help Shein and Temu," said Les Mandelbaum, president of modern decor company, Umbra, which makes its goods in Vietnam. "The Trump administration thinks they have been weakened, but even with the tariffs, they are the cheaper alternative for consumers

The companies have been flexible in adapting, and they have warehouses in the U

I don't think they are weakened to the degree the administration hoped. "Ed Sander, analyst at Buzz China, said that by the surface numbers, the two Asian low-cost retailers have been ly weakened by the trade war

But Susannah Streeter, head of money and at U. -based financial services firm Hargreaves Lansdown, told CNBC that due to the nature of their models, "They are still ly to be formidable competition. "Temu and Shein can manufacture and distribute ducts "super-cheaply," she says, and they have no brick-and-mortar stores to support, while also relying on low-wage manufacturing locations

In addition, the companies "have been known for implementing aggressive cost-cutting measures throughout the supply chain," Streeter added

The Asian manufacturing methods have raised serious concerns materials sustainability, the environmental impact of duction, and human rights violations in the labor force that may be required to sustain the low price

But the bottom line, according to Streeter, is that "the playing field is not level, despite the tariff changes. ""Although a growing number of consumers are increasingly concerned sustainability and human rights, and may resist the lure of the fast fashion giants, households on tight budgets are ly to be tempted by price, rather than reputation," she said

Price hikes to come, fear of 'consumer goods depression'That is Mandelbaum's primary concern, as his company has cut down on ducts being manufactured overseas and exported to the U. , shifting ducts to Europe, the company's second-largest market, and other parts of the world

Represents half of his company's sales. "When you have a brand to tect and an original duct, you have material standards and your price reflects that," Mandelbaum said

Temu and Shein may end up being beneficiaries of the trade war as consumers look to trade down in brands. "There is a great appetite from the American consumer looking to pay for cheaper copies

I see more people worried their money and that has translated into a hesitancy to spend, and they are less quality conscious," he said

Umbra has held back on raising prices on some of its items, but depending on duct margin, has increased some prices up to 10%. "On the lower-priced goods, we have not, and some of those ducts we are no longer exporting to the U

Because a sale at a loss is not a sale," he said

Many of the price increases expected in retail have yet to hit, but prices are slowly creeping up, according to Dana Telsey, CEO of the retail re firm Telsey Advisory Group. "Right now, we seem to be just seeing seasonal pricing swings, but in my view many of the price increases will begin mid to late summer, particularly surrounding the back-to-school time period," Telsey said. "For the most part, the price increases will be more on the unique items

Many of the retailers in their most recent ary have spoken to price increases on a select number of goods and what seems to be around an average mid-single digit percentage rate increase. " Buzz China re has shown that Temu loses some of its competitiveness when tariffs are higher than 50%

That was why it completely stopped shipping packages to the U

At the end of April, according to Sander

Instead, it focused on shipping from local warehouses in the U. , where import taxes have already been paid for the goods

That is a strategy to survive, if not thrive in the U. "The disadvantage is that the price difference with other platforms is smaller when shipments are done from U

Warehouses," Sanders said, citing Temu's aim to be 85% of Amazon's price

Temu restarted its direct-to-consumer package shipments from China after the May tariffs pause which pushes out the steepest tariffs on Chinese goods to August, and the DTC shipping strategy is expected to be fully reinstated by the end of July

But what ultimately happens between the U

And China in trade talks looms large for the two companies. "If Temu and Shein will be beneficiaries will largely depend on what will happen to the tariffs after these 90 days and if they can maintain their price advantage," Sander said

Temu and Shein have ven to be highly innovative and adaptive, according to Drew Bernstein, co-chairman and co-CEO of accounting firm Marcum Asia, which specializes in working with Asia-based firms. "We will see how they adjust their sourcing and supply chain strategies to recapture the U

Customers they have worked so hard to win," he said

In the second quarter. "Whether this flood of cheap goods will lead those also to erect new tariff barriers remains to be seen," he added

But Bernstein thinks it is too early to talk with certainty American consumers "trading down," given that jobs data continues to be solid and the tax cuts included in the newly passed One Big Beautiful Bill Act

Mandelbaum says the existing economic uncertainty has been enough to do the damage. "We are in a consumer goods depression globally," he said. "I have never seen people stay put for so long

People are hesitant to move

Normally, when people move, they buy new goods

When you stay put, you don't normally do that," he said

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