The Temu Apocalypse Has Been Postponed

Filed under: TARIFF WAR

“August 22 saw record large tariff collection of nearly $23 billion on the day, bringing the August total to nearly $30 billion with the month not yet complete,” Treasury Secretary Scott Bessent announced on X this week with the chart above. “The best part: no consumer price inflation. Since the tariff surge began in April, household goods prices are up just 0.7% annualized.” Bessent has predicted that tariff revenue will exceed $300 billion in 2025, money which will lower the deficit and reduce our debts, addressing national economic risks.

Instead of contracting as critics of Trump administration tariff policy had predicted, the American economy saw real growth of 3.3 percent in the second quarter of 2025. Since June, the White House has been claiming the highest level of blue collar wage growth in 60 years while experts called it a mirage. In fact, blue collar jobs are on the rise while white collar labor is a bear market. Economic doomsday seems to have been canceled. Even gas prices are low, boosting consumers.

The so-called de minimis exemption was supposed to end today. Donald Trump vowed to close this loophole, in which items under $800 in value are not subject to regular tariff rates, at the end of April. Chinese dotcom retailer Temu lost nearly half its American user base as 100 percent duties would have erased their entire cost advantage. But during July, the administration lowered the new tariffs to 30 percent for 90 days and cut the small-package rates to 54 percent.

As a result, Temu profts were down 21 percent year-on-year in the second quarter, even though revenue was up 7 percent. That truce was extended another 90 days this week, postponing the Temu apocalypse again. Bessent and Stephen Miran, Trump’s chief economic advisors, articulated a strategy of high initial tariff rates followed by a process of negotiations in which the real rates are reduced to a ‘new normal’ level. The strategy has its critics and its risks. However, in the end, it will be judged by its results rather than our fears.

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