The recent US tariff changes are creating a whirlwind of challenges that brands and retailers like you are now forced to navigate. These announcements influence just about every part of your business including sourcing costs, fulfilment strategies and pricing structures. Then, of course, there are the tariffs’ effects on markets, consumer confidence and the global economy.
The current environment is poised to transform how businesses operate across borders. To remain profitable and maintain customer trust, it is essential to grasp the implications and adapt proactively.
What’s changing?
On April 3rd, the US announced new tariff measures that significantly alter import costs. Key updates include:
- A 10% baseline tariff on all imports from Rest of World (ROW) countries.
- Additional country-specific tariffs beginning 9 April.
- The removal of the $800 de minimis threshold for China-origin goods, effective 2 May. That means all shipments will require full duty calculations and a 34% tariff.
- Increased customs scrutiny on shipments from China, leading to potential delays and added costs.
- Retaliatory tariffs from key markets, including a 34% tariff on US-origin goods in China and a 25% tariff in Canada.
How new tariffs impact enterprise ecommerce retailers
Ok, so the landscape has changed and will undoubtedly continue to change. But how exactly will tariffs, retaliatory tariffs and eliminating the de minimis threshold affect you? Possibly in these ways:
1. Higher landed costs
If you rely on suppliers from China, Vietnam and the EU, you will see higher import costs due to new tariff structures. Your margins may shrink unless you move quickly to optimise sourcing, pricing or fulfilment strategies.
2. Supply chain disruptions
The removal of the $800 de minimis threshold means direct-to-consumer (DTC) brands that previously relied on small-parcel shipping from China will face increased compliance burdens, customs delays and shoppers can face unexpected fees at checkout as well as longer shipping times.
3. Pricing pressure and market hesitation
Tariffs often lead to higher product prices, which can slow demand and discourage international expansion. Some brands may choose to delay or rethink their US growth plans amid the uncertainty.
How you can adapt
Uncertainty does reign at the moment. But that doesn’t mean you and your brand are helpless against it. There are steps you can take to protect yourself and your business. ESW’s Vice President of Global Commercial Services advises the following:
Optimise sourcing and trade compliance: Evaluate your HS code classifications and explore alternative suppliers or tariff-exempt markets like Canada or Mexico.
Adjust fulfilment strategies: Consider shifting inventory to regional warehouses to minimise exposure to US tariffs.
Enhance pricing strategies: Plan for potential price increases while maintaining competitiveness through smart promotions and bundling.
Conclusion
Tariff changes create challenges but also opportunities for brands to rethink their global strategies. By staying informed and leveraging smart fulfilment, trade compliance, and diversified sourcing, ecommerce retailers can minimise risks and continue to grow in this evolving trade landscape.
Reach out to find out how we can help your brand navigate these waters.
