TikTok staffers say its US e-commerce business is slumping amid high tariffs

CFOTO/Sipa USA via Reuters Connect.US sales on TikTok Shop are slumping, company employees told BI.The drop-off stems in part from fewer sales from foreign sellers in the wake of new US tariffs, they said.Temu, Shein, and other e-commerce firms are also scrambling to adjust to US tariffs on China.Trump's tariffs are taking a toll on TikTok.The company's e-commerce business, TikTok Shop, is off to a slow start in the US this year, four staffers who work on its shopping product told Business Insider.The employees described declines in daily US sales from foreign sellers that contributed to an overall sales drop-off beginning in late March.During several days in early May, TikTok Shop's daily US sales from foreign sellers were down roughly 20% to 25% month-over-month, two of the staffers said. Many of TikTok's foreign sellers are based in China, where tariffs on some products crossed 145% in April.Internal data viewed by BI also showed daily US sales, measured in gross merchandise volume, climbed in March before falling later that month ahead of tariff announcements. The company had expected steady GMV growth this year, similar to what it saw in 2024, one of the staffers said. Sales were still up year over year in 2025.The staffers attributed the drop-off to tariffs, which have created cost headaches for merchants, as well as broader challenges onboarding new sellers.TikTok has faced multiple setbacks in the US this year, including a brief shutdown and app store ban after owner ByteDance failed to divest from the app.TikTok Shop is a major business priority at the company, which also makes money from advertising and in-app payments. E-commerce drives hundreds of billions in annual sales on TikTok's Chinese sister app, Douyin. But progress in the US hasn't met leadership's expectations. The US e-commerce business failed to meet many of its performance goals in 2024. The company has recently shaken up the team's leadership structure, elevating managers with experience working on Douyin to run different departments.A TikTok spokesperson declined to comment.Sellers are worried about hiking pricesAmid broader economic uncertainty, the number of new sellers onboarding to TikTok Shop in the US is falling this year, two of the employees said.It's also become much harder for Shop sellers to plan pricing and logistics as tariff costs shift."Sellers are hesitant to ship to their US warehouses because they don't know what they can sell," one of the employees said. "If their prices are more than twice as expensive as before, they might not be competitive versus others who still have US inventory."Chinese goods, key for TikTok's global e-commerce business, have become much more expensive to source. Tariffs on Chinese goods in April hit 145% for items like toys, but have since been pulled back to 30% for a 90-day window as the US and China continue negotiating. The Trump administration also removed the de minimis exemption that let some merchants avoid tariffs on small shipments.In early April, TikTok sent a memo to sellers with information on the tariff policy shifts, stating it was actively monitoring the changes.Tariffs are squeezing both Chinese and US companiesIt's not just Chinese Shop sellers that are struggling with tariffs.US-based companies that rely on Chinese manufacturing are also feeling the effects.Wyze, a company based in the Seattle area that makes security cameras and smart home appliances and has sold around 750,000 items on TikTok Shop, wrote in late April that it had paid around $255,000 in tariffs on a $167,000 shipment of floodlights from China.The company did not respond to a request for comment.Toys are also taking a hit. While some toy merchants are looking for new suppliers outside China, that can be difficult. For example, companies that sell plushies told BI in April that they are particularly dependent on Chinese manufacturing for making the soft toys.Some of the big TikTok Shop sellers are eating tariff costs, but not all merchants can afford it, one of the TikTok staffers told BI."Where it's really hurting is small businesses who get component parts from China," they said.And other e-commerce platforms, like Shein and Temu, which built businesses tied to the de minimis loophole that avoided tariffs altogether, are scrambling to adjust their strategies.A wild year for TikTokTikTok's bumpy start to 2025 comes at a moment of tension for the company's US e-commerce business.The company has undergone a string of restructurings in the past year that have given greater control of the business to ByteDance leaders from China. In April, US operations head Nico Le Bourgeois was pulled under e-commerce executive Mu Qing, a manager who previously worked on Douyin. That month, the company also restructured its global governance and experience team, putting more control in the hands of Chinese and Singaporean leaders as it rolled out Shop in new markets like Mexico and Brazil.TikTok's US future is in limbo due to a divest-or-ban law that requires ByteDance to separate itself from its US assets.TikTok has until June 19 to find a new ownership structure. However, Trump has indicated that he could extend that deadline. He has said he has a warm spot in his heart for TikTok.Have a tip? Contact this reporter via email at [email protected] or Signal at @danwhateley.94. Use a personal email address and a nonwork device; here's our guide to sharing information securely.Read the original article on Business Insider

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