How to Navigate
Global Trade
The effects of Trump’s tariffs are widely debated, with outcomes depending on how businesses, consumers, and foreign governments respond. Global trade is complex, we can help you.
Selected Levies Under U.S. Reciprocal Tariff Plan
Global Trade Strategies
What Tariffs Means for Global Trade
Trump’s tariffs, have significant implications for eCommerce businesses in the U.S. Trump declared April 2, 2025, as "Liberation Day," unveiling a "reciprocal tariff" policy. This includes a baseline 10% tariff on all imports to the U.S., with higher rates for specific countries—up to 34% on China, 20% on the European Union (EU), and up to 49% on others, depending on their trade practices.
The tariffs target nearly $2.2 trillion in annual U.S. trade with Canada, Mexico, and China alone, plus trillions more with the reciprocal policy. This could reduce global trade volumes as higher costs deter imports to the U.S., the world’s largest consumer market.
Practical Steps for eCom Businesses
Audit Supply Chains: Spot tariffed products and consider U.S. or tariff-free suppliers.
Adjust Pricing: Gradually raise prices or bundle tariffed items with unaffected ones to protect margins.
Diversify Offerings: Add digital or U.S.-made products like subscriptions or print-on-demand.
Watch Tariff Changes: Stay updated and shift sourcing quickly.
Use Marketing: Suggestion, promote “tariff-free” or “American-made” to boost appeal.
Impact of Tariffs on eCommerce
Higher Product Costs
Many eCommerce businesses rely on imports—like electronics from China, raw materials from Canada, and produce from Mexico. Tariffs of 20–25% raise costs for U.S. importers, who often pass these on to retailers. A $50 item from China might now cost $60, pushing sellers to either raise prices or take a margin hit. Small businesses, especially on platforms like Shopify or Amazon, are hit hardest as they lack the scale to absorb costs or switch suppliers easily.
Supply Chain Disruptions
Tariffs push businesses to shift production from countries like China, but with 60% of Amazon’s top sellers sourcing there, quick moves to Vietnam or India can raise costs and cause delays. The 25% tariffs on Canada and Mexico also disrupt North American supply chains—U.S. sellers of Canadian or Mexican goods face higher costs unless strict origin rules are met.
Impact on Pricing & Demand
Tariffs drive up prices—e.g., a $200 TV could rise to $240—undermining eCommerce’s price competitiveness. Shoppers may turn to cheaper alternatives, but U.S. production often can't scale quickly. On marketplaces like Amazon, higher prices can hurt sellers’ visibility, favoring competitors who absorb the costs or avoid tariffs.
Opportunities for Domestic Focus
Tariffs give an edge to eCommerce businesses selling U.S.-made goods, which may appeal more to patriotic or price-sensitive buyers. Sellers of tariff-free items (like digital products or USMCA-compliant goods) can benefit as others struggle. Dropshippers may pivot to U.S. suppliers to avoid delays, despite higher domestic costs.
Logistics & Fulfillment Costs
Tariffs can indirectly raise shipping costs as firms reroute supply chains—ocean rates from Southeast Asia rose 15% in early 2025. Uncertainty may lead eCommerce sellers to over- or understock, affecting cash flow and sales. U.S. sellers shipping to Canada or Mexico also face retaliatory tariffs, squeezing margins.
Consumer Behaviour Shifts
As prices rise, eCommerce shoppers are cutting back—online discretionary spending dropped 7% in early 2025. Many are shifting to second-hand platforms or buying direct from manufacturers, challenging traditional eCommerce models.
Speak to a Global Trade & Tax Expert Today
For tariff specific help, select Global Solution from the dropdown menu.
Schedule a call today
