PDD Holdings Inc. (NASDAQ:PDD) warns that Temu is facing fresh margin pressure from upcoming European Union tariffs, threatening to hike costs and slow shipping times just months after U.S. trade policy shifts disrupted its cross-border model.
Co-CEO Lei Chen said the company is now adapting its operations to a rapidly changing global regulatory environment to preserve Temu’s long-term growth. The comments, made on PDD’s second-quarter earnings call, come as Temu faces mounting trade barriers in two of its largest overseas markets.
Europe Becomes Temu’s Next Trade Challenge
Responding to a question about the EU’s new customs duties on low-value imports, Chen acknowledged that the changes will pressure Temu’s cross-border business.
“On the changes to the EU customs duties that you mentioned, our team is actively assessing and adapting to them,” Chen said.
