PDD Holdings Inc. (NASDAQ:PDD) said upcoming European Union customs duties on low-value imports will create fresh margin pressure for Temu, reducing fulfillment efficiency and increasing costs for affected cross-border orders. Co-CEO Lei Chen made the comments during PDD's second-quarter earnings call, as Temu faces new trade barriers in two of its largest overseas markets following earlier shifts in U.S. trade policy. PDD is responding by adjusting its supply chain, optimizing fulfillment, onboarding more high-quality local merchants and accelerating local warehousing and fulfillment infrastructure. The strategy is intended to reduce reliance on direct cross-border shipping and strengthen Temu's resilience to regulatory changes. Chen also said PDD will invest in compliance capabilities, platform governance and systematic intellectual-property protection, which management said was reinforced by a recent favorable ruling in IP litigation involving an industry peer. Despite the expected short-term disruption, PDD said its long-term global strategy remains unchanged.