323. How to Protect Your eCommerce Business From Trump’s New Tariffs

While I’m going to give you a general overview of the latest U.S. tariff announcements to help clarify the confusion, just know—this is an evolving situation. I held off recording this episode for as long as possible to capture the most up-to-date information, but by the time you’re listening, things may have changed again.

To give you some context, I’m recording this on Monday, April 7th. At last check, China retaliated against our 34% tariff, and then Trump retaliated again—effectively pushing total tariffs on Chinese imports to over 100%. Fingers crossed it doesn’t go that far.

But let’s be honest… even if those rates are walked back, this trade war isn’t going away any time soon. And with the reasoning behind these tariffs changing depending on who you ask—manufacturing, trade deals, closing the deficit—it’s hard to tell what success even looks like.

That’s why today’s episode focuses on what we know so far, and most importantly, how to respond as an eCommerce business owner—because one way or another, this will touch all of us.

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Control What You Can Control

Before we dive into the specifics, I want to remind you that as the CEO of your company, your #1 job is to focus on what you can control.

We’ve talked about this in previous episodes, but it bears repeating. The news and social media exist to capture your attention—and they’ll do it by making you feel anxious, overwhelmed, and powerless. The more you doomscroll, the more money they make.

Now, I’m not saying bury your head in the sand. Staying informed is important—but don’t get stuck in the spiral. Your energy is too valuable.

Right now, your mindset is just as important as your marketing strategy. Yes, things are shifting. Yes, it feels heavy. But your customers still need you to show up. You’re still building something meaningful.

Back in 2009, I ran my brick-and-mortar boutique during what was then the worst recession I’d ever lived through… and I still did $650K in sales that year. Why? Because I didn’t sit back and wait—I leaned in harder. We called customers directly. We got scrappy. We got visible.

Maybe this is your season to roll up your sleeves a little more. Maybe you’ve stepped back and delegated—which is amazing—but now might be the moment to get closer to your numbers, your marketing, and your customers again.

Don’t panic… just be present. Keep your eye on the prize and keep moving forward.

And remember, you are not alone. According to early results from Proof to Product’s State of the Industry survey, at least 44% of small business owners are already feeling the effects of these changes—and that number is probably underreported.

Aside from the big corporations who can lobby for carve-outs or do layoffs to recoup losses, the rest of us are in this together. And while that doesn’t make it easier, it does mean you’re not the only one figuring it out.

The Highlights of Trump’s Tariff Policy Announcements

Here’s a high-level summary of what’s happening as of April 2025:

• April 5th: 10% global tariffs took effect on top of existing duties
  
• April 9th: Higher reciprocal tariffs began rolling out (e.g., 34% on China)
  
• May 2nd: The De Minimis Exemption is removed for China & Hong Kong
  
• USMCA-compliant goods remain duty-free
  
• Non-USMCA goods now face a 25% tariff (10% for energy/potash)
  

The De Minimis Exemption previously allowed goods under $800 to enter duty-free. But under these new rules:

• Non-postal shipments from China & Hong Kong (DHL, FedEx, UPS) are now fully dutiable—no matter the value
  
• Postal shipments (e.g., China Post) under $800 will be charged 30% or $25 per item, whichever is greater—rising to $50 on June 1st
  

If you want more details, I’ve linked a Google Doc in the show notes with a full breakdown and up-to-date links.

For Canadian and European sellers whose customers are primarily in the U.S.—good news: the De Minimis Exemption still applies (for now), so most U.S. customers won’t be charged duties when shopping your site.

That said, I recently spoke to a European client who’s seen a slowdown in U.S. sales. She wondered if Americans were hesitant to buy internationally. And while I can’t speak for everyone, my gut says the slowdown is more about shaky consumer confidence overall, not her location.

There was also that short-lived rollback of De Minimis a few months back that caused a ton of confusion for shoppers. That may have spooked some customers temporarily, but it’s not necessarily permanent.

My advice? Keep marketing to U.S. customers, but be clear in your messaging. Remind them you’re a small business, and that their order won’t incur duties under $800. And at the same time, start building up your local market—no matter where you’re based.

If you’re using Shopify, remember that the duties calculator is now available on all plans. You can collect duties and taxes at checkout and ship with prepaid labels to avoid delays in customs.

How to Minimize the Effects of the Tariffs

If these tariffs go into full effect and impact your products directly, here are strategies to help soften the blow and protect your bottom line.

Negotiate With Your Existing Suppliers

If you’re working directly with manufacturers, this is the time to renegotiate. Even if you can’t place massive orders, suppliers value long-term relationships. And many understand these tariffs might not be permanent.

Consider offering:

• Faster payment terms for better pricing
  
• Commitment-based pricing tiers (e.g. X units per quarter at Y price)
  
• 12-month production schedules to help them plan
  

Get creative. Suppliers may be more flexible than you think.

Pay Up Front for a Discount

Cash flow is everything—for you and your supplier. If you usually pay on Net 30 or longer, offer to pay:

• 100% up front, or
  
• 50/50 (half on order, half on delivery)
  

They reduce their risk and you might unlock better pricing—without needing to increase order size.

Let Them Batch Your Production With Other Orders

Ask if your supplier can combine your order with another client’s run to reduce setup and labor costs. It’s an easy way for them to save—and those savings might be passed along to you.

Just clarify your timeline up front so everyone’s on the same page.

Commit Now, Ship Later

If you know you’ll need more inventory over the next few months, negotiate a “ship-and-hold” arrangement:

• You commit to a larger run (e.g. 2,000 units)
  
• They hold it and ship in smaller batches
  
• You’re only invoiced as it ships
  

It’s a win-win for bulk pricing without blowing up your storage or cash flow.

Use a Bonded Warehouse

This is similar to the commit now, ship later option, except you’re bringing all your inventory into the States at once.

What makes this approach different is that instead of paying duties and taxes upfront, you can store your products in a bonded warehouse, which is a secure facility overseen by U.S. Customs. Duties aren’t due until the inventory is officially released into the domestic market.

Here’s why bonded warehouses might be worth considering:

Private bonded warehouse: Fully controlled space, better for high-volume importers with consistent international sales.

• Duty deferral: You don’t pay duties or taxes until your products leave the warehouse and enter the U.S. market—helpful for managing cash flow.
• Re-export advantage: If you end up shipping products to customers outside the U.S., you might avoid duties altogether.
• Ideal for bulk importing: Great if you’re bringing in a large shipment ahead of peak season or to prep for major sales events.
• Flexible storage: You can store goods for extended periods (often up to 5 years) without triggering tax obligations.

Two types available:

• Public bonded warehouse: Shared space with lower commitment, ideal for smaller or growing businesses. (Typically best if under $10M)
• Private bonded warehouse: Fully controlled space, better for high-volume importers with consistent international sales.

Explore Alternative Sourcing Strategies

If your current supplier can’t get the costs where you need them, it might be time to look elsewhere. This doesn’t mean overhauling everything—just exploring smarter options.

Compare Manufacturer vs. Distributor Pricing

Buying direct sounds like the cheapest route, but that’s not always the case for small businesses. Distributors:

• Get bulk discounts
  
• Handle import logistics
  
• Offer faster turnarounds and lower MOQs
  

Sometimes, the per-unit cost from a distributor ends up being less—especially when you factor in freight and fees.

Join Trade Buying Groups or Co-Ops

Can’t qualify for bulk pricing on your own? Join forces with others in your industry. Look for:

• Industry co-ops (stationery, giftware, handmade, etc.)
  
• Maker communities or trade show collectives
  
• Informal buying groups (Etsy forums, peer chats)
  

Even 2–3 similar businesses teaming up for packaging or supplies can unlock better pricing and split shipping costs.

Optimize Your Supply Chain to Serve Your Largest Market

While you may not be able to bring all production to the U.S., you can move certain pieces closer to your customer.

For example:

• A Canadian greeting card company now prints U.S. orders in San Diego
  
• POD (print-on-demand) partners can reduce inventory risk
  
• 3PLs can simplify logistics and shorten delivery windows
  

If your customers are concentrated in one country, making even small adjustments could save you money and stress.

Cut Costs Through Product Adjustments

Sometimes the most efficient way to protect your margins is by simplifying the product itself.

Use Off-the-Shelf Components Instead of Custom

Custom = expensive. Instead, try:

• Plain boxes + branded stickers instead of custom packaging
  
• Standard jars or closures vs. custom molds
  
• Pre-dyed fabrics vs. printing your own
  

You can still create a great unboxing experience—just without the extra cost.

Consider Material Substitution

Some brands reverse-engineer their product from the price point. For example, a handbag brand I spoke with years ago designed their subscription box item around the cost—not the other way around.

Consider:

• Launching a lower-cost version
  
• Swapping imported materials for U.S.-made alternatives
  
• Creating seasonal SKUs based on what’s affordable now
  

It’s a creative way to stay profitable without cutting quality.

Optimize Your Logistics

Your product isn’t the only place to save. Shipping and fulfillment costs add up fast—especially when crossing borders.

Consolidate Freight or Source Closer to Port

You might save more by optimizing where and how your products move. Look into:

• Splitting containers with other brands
  
• Asking if your supplier has a coastal warehouse or factory
  
• Using a 3PL that consolidates international goods
  

Fewer miles = lower costs = happier margins.

Adjust Your Product Assortment

Katie Hunt of Proof to Product says it best: if the math doesn’t math, let it go.

That might mean:

• Retiring low-margin products
  
• Removing items from your wholesale line
  
• Doubling down on products that are easier to scale
  

Not every SKU deserves to stay just because it sells. Protect your margins and keep the business healthy.

Cut Costs in Other Areas

If you can’t fix your margins through the product itself, look at your operations. Aim for a 60% gross margin—but if you’re closer to 50%, you can still win by trimming expenses elsewhere.

Try:

• Canceling unused software or services
  
• Cutting marketing channels that aren’t performing
  
• Renegotiating shipping rates if you’re a high-volume sender
  

Profit isn’t just about pricing—it’s about efficiency too.

Consider Selling to Other Markets

So earlier I mentioned if you’re outside the US you might want to start looking at other markets to sell to that more favorable trade deals with your country. And that might be something you want to do even if you’re physically based here in the US. 

I recently came across a video from a product-based business owner who manufactures entirely in China. She’s got $160K worth of inventory sitting, ready to go. But she’s not taking delivery on it because with the current proposed tariffs, it just doesn’t make financial sense to bring it into the States and try to sell it here.

She’s not sure what her next step is yet, but she’s exploring selling to other international markets instead—markets that don’t have the same tariff restrictions. And she’s looking into using an overseas distributor or a local 3PL to manage fulfillment on her behalf.

This is such a smart—and honestly, brave—move. Because rather than forcing a broken system to work, she’s looking at where there’s still opportunity and meeting her customers where they are, even if it’s not here in the U.S.

Now I know… not every business has the ability to pivot like this, especially if your brand is already established in the U.S. or if your product has specific regulatory requirements in other countries. But if you’re feeling stuck or at a breaking point, this is just one more example of what it looks like to stay scrappy and strategic in the face of uncertainty.

It’s not always about pushing harder—it’s about being willing to look left when everyone else is looking right.

Lead With Your Head, Not Your Heart

Our friend Kristin Fisher said it best: you’ve got to lead with your head, not your heart.

It’s hard to raise prices, cut products, or renegotiate deals. But holding back because it feels bad isn’t protecting your business—it’s putting it at risk.

Raise your prices slowly and strategically. Monitor the results. Maybe you’ll sell fewer units—but earn more per order. Or maybe your product is high-volume enough to survive on slimmer margins.

There’s no one-size-fits-all. Just stay close to your numbers and let the math guide you.

Final Thoughts

If you want help navigating this changing landscape, check out the resources linked in the show notes—including the updated tariff doc, related podcast episodes, and info on joining The Lounge, my membership for data-driven eCommerce growth.

And remember what I said earlier:

Don’t get distracted by the noise. Stick to your strategy and keep it moving.

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