When a Chinese factory owner filmed himself in front of a wall stacked with luxury handbags on TikTok and asked American consumers, “Why don’t you just contact us and buy from us?” the message started a new pattern between the world’s two largest economies. 

The trend gained further momentum last month with the resurgence of Trump-era trade restrictions, which continued to inflate the cost of Chinese products. 

Faced with escalating prices and tariffs as high as 145 per cent on many Chinese goods, American consumers began seeking cheaper deals. They bypassed conventional retail and import channels, turning to platforms like DHgate, Temu, Taobao, and TikTok Shop for affordable, direct-from-China deals.

The growing popularity has become evident in mid-April when an e-commerce platform DHgate jumped to second place – behind only ChatGPT – while another online Chinese shopping platform Taobao climbed to fifth place up from 47th place on the US App Store’s free download chart.

Influencers have flooded TikTok with content showing handbags, leggings, and sneakers allegedly sourced directly from Chinese factories. Some even walk viewers through their buying process, sharing spreadsheets of manufacturers. Whether these suppliers are legitimate original equipment manufacturers (OEMs) is often unclear but the content keeps repeating itself.

‘De minimis’ tariff loophole

The Chinese online retail giants used the "de minimis" provision to ship inexpensive items directly to the US without incurring duties or import taxes. This long standing rule permits the entry of packages under $800 without these charges.

“Until now, many Chinese sellers have relied on the de minimis exemption under Section 321 of the Tariff Act of 1930, which allows goods valued under $800 to enter the US duty-free if shipped directly to consumers,” says Professor Henry Gao of Singapore Management University. 

This exemption allowed platforms like “Temu, Shein, and TikTok Shop” to bypass standard tariffs by splitting shipments or leveraging air cargo and thereby facilitating a high volume of direct Chinese imports.

TikTok, the social media platform owned by the Chinese company ByteDance, has become a key platform for this trend.

Videos promoting direct purchases from Chinese factories on the app soared nearly 250 percent following tariffs.

Hashtags like #LuxuryExposed and #BuyingFromChina have racked up millions of views, with videos often paired with punchy captions like “Trump bullied the wrong country” or “Now this is how you do a trade war.”

One American influencer, Elizabeth Henzie, has leaned in entirely and shared the list of Chinese manufacturers. Her TikTok following skyrocketed, landing her an affiliate partnership with DHgate.

“Seeing how other countries are coming together to try to help American consumers has boosted my morale,” she said.

Chinese manufacturers also indicated that their increased video presence on TikTok was a direct reaction to falling sales. Yu Qiule, a co-owner of a fitness equipment company in Shandong province said he started posting to TikTok in mid-March to find more customers after the tariffs prompted a wave of canceled orders.

Similarly, Louis Lv, the general manager of export at Hongye Jewelry Factory in Yiwu, Zhejiang province, stated that his company began posting on TikTok towards the end of 2024 due to a decrease in domestic sales. However, he pointed out a substantial rise in views on their TikTok videos since the Trump administration announced the tariffs.

"The philosophy of Chinese businessmen is we will go wherever the business is,” he says in an interview.

Expiry of duty-free rule

However, this favourable period is coming to an end.

The longstanding duty-free has been closed by the US President Donald Trump. While supporters say the rule streamlined customs and benefited shoppers, both Trump and President Joe Biden criticised it for harming US businesses and enabling the smuggling of illegal goods, including drugs.

The White House confirmed in early April that the de minimis exemption would be removed starting today at 12:01 a.m. ET, meaning most factory-direct parcels from China will now face regular customs duties and potentially new Section 301 tariffs.

In Gao’s words, “The factory-direct model faces significant headwinds.”

Parcels worth less than $800 will be subject to a 120% levy or a flat fee of $100, rising to $200 from June.

In anticipation of this policy shift, Meta’s finance chief Susan Li confirmed on Wednesday that “Asia-based e-commerce exporters” had “reduced their spending” on platforms like Facebook and Instagram.

Rise of “21^st century Silk Road”?

Professor Gao notes that while many consumers may be unaware of the tariff policy details, they are reacting to “lower prices and shorter supply chains”.

“The surge in factory-direct purchases from platforms like TikTok Shop and Temu reflects both rising consumer price sensitivity and strategic adaptation by Chinese firms,” he tells TRT World.

Looking ahead, these developments point towards a fundamental transformation in how the US and China engage commercially. 

“In the long term, this signals a shift in US-China trade — from large-scale containerized trade to fragmented, digitalized retail flows — and now potentially toward a decoupling or forced re-routing of supply chains,” he continues.

“Washington’s trade strategy is clearly evolving to treat even low-value consumer goods as a site of strategic competition.”

In simpler terms, this suggests a long-term change in US-China trade, moving from large shipments to individual online purchases, potentially leading to a separation in trade or new supply routes as the US now views even small consumer goods as geopolitically important.

Known as Dunhuang in Chinese and dubbed the “Little Yellow App” by shoppers, DHgate has also proactively shifted its strategy. Launched in 2004 as a B2B portal, the platform reinvented itself over the past five years, pivoting toward direct-to-consumer sales and social commerce. Its founder, Wang Shutong, once described the vision as building a “21st-century Silk Road.” 

In early April, the company launched its Stock & Save campaign, aimed at connecting buyers with sellers amid tariff uncertainty. But without the legal shelter of de minimis, even low-cost Chinese goods could soon become less competitive. 

“Unless Chinese sellers move production outside China or establish US-based distribution networks, their cost advantage will erode,” Gao warns.

But, the clock is ticking.

TikTok videos still continue to display “factory-direct” goods, often at a fraction of US retail prices. Whether those are truly legitimate — or sustainable — is a question that will be tested as new trade restrictions take hold.