Core Viewpoint - FedEx's shares dropped significantly due to a disappointing profit forecast, attributed to the impact of President Trump's tariffs on global transit [1][3]. Financial Performance - FedEx expects earnings per share of $3.40 to $4 for the current quarter, slightly below the forecasted $4.05 [1]. - The company reported adjusted earnings per share of $6.07 for the quarter ended May 31, exceeding expectations of $5.84 [12]. - Revenue for the same quarter was $22.22 billion, surpassing projections of $21.79 billion [13]. - US daily package volume increased by 6% year-over-year, with US ground home delivery volume rising by 10% [14]. Market Sentiment - The disappointing forecast led to a decline in investor confidence, as FedEx is viewed as a bellwether for various industries [1][15]. - The stock initially fell by about 6% on the day of the announcement [3]. Trade and Tariff Impact - FedEx executives indicated that tariff policies are expected to continue affecting US-China air trade, with the company being more exposed to China compared to UPS [4]. - The tariffs have been reduced from an initial 145% to 30%, but this remains significantly higher than previous rates [4]. - The end of the "de minimis" exemption, which allowed duty-free entry for shipments under $800, is also impacting FedEx's operations [5]. Cost Management - FedEx announced plans for $1 billion in cost-cutting measures for fiscal year 2026, although challenges are anticipated due to ongoing trade unpredictability [11].

Temu has reportedly stopped shipping products from China directly to U.S. consumers due to the elimination of the de minimis exemption that had shielded small packages from U.S. tariffs.“This shift is part of Temu’s ongoing adjustments to improve service levels,” a Temu spokesperson told the Wall Street Journal (WSJ) in a report posted Friday (May 2).This marks a “dramatic shift” in the company’s business model, the report said.Temu had rapidly grown its business in the U.S. by sending small, inexpensive it ...

Core Viewpoint - Temu, a Chinese e-tailer, has introduced significant import charges of approximately 145% due to new tariffs imposed by President Trump, which could drastically increase the total cost of products for consumers [1][4]. Pricing Impact - The import charges can exceed the price of the products themselves, with examples showing a summer dress priced at $18.47 costing $44.68 after a 142% surcharge, and a child's bathing suit priced at $12.44 costing $31.12 after a 150% fee [2]. - A handheld vacuum cleaner listed at $16.93 now costs $40.11 when factoring in a 137% markup due to import charges [2]. Company Response - Temu has stated that these import charges cover customs-related processes and costs, indicating that the listed amount may not reflect the actual fees paid to customs authorities [3]. - The company acknowledged that recent changes in global trade rules and tariffs have increased its operating expenses, leading to price adjustments starting April 25, 2025 [5]. Competitive Landscape - Rival discount retailer Shein has also raised prices but has not implemented additional import charges, instead including tariffs in the prices displayed at checkout [4]. - Both Temu and Shein had previously warned of price increases following the imposition of a 145% tariff on many imports from China [4]. Market Position - Temu's popularity in the U.S. has surged since its launch in 2022, primarily due to its low prices on various products, which allowed consumers to purchase items without significant financial strain [5][6]. - However, the new import fees may align Temu's prices more closely with U.S. competitors like Amazon, Walmart, and Target, potentially diminishing its competitive edge [6]. Advertising and Market Ranking - Following the announcement of the tariffs, Temu has significantly reduced its online advertising spending in the U.S., resulting in a drop in its app store ranking from the top 10 to No. 73 [7]. - Shein has also experienced a decline in its app store ranking, falling from 15 to 54 [7].