Second Round of Tariffs on China: How Should Cross-Border Sellers Respond?

At the beginning of 2025, many major events have taken place in the cross-border e-commerce field. In addition to the policy changes of major mainstream e-commerce platforms themselves, policy changes at the national level are also quite frequent. The most recent change is that the United States will impose an additional 10% tariff on China starting from March 4.

That’s right, adding up the 10% that came into effect in early February, the total is 20%. Obviously, the impact of tariff changes on cross-border e-commerce is significant, and some categories will even be hit harder. But no matter how the policy changes, business still needs to be done. How do cross-border e-commerce sellers deal with the impact?

Ⅰ. Impact of policy changes

1. Profit margin compression

The increase in tariffs will have an impact on all export commodities, but some categories will be hit harder: consumer electronics, small household appliances, plastic daily necessities, hardware tools, outdoor products, etc. In particular, the total tax rate for products involving steel and aluminum products may even be as high as 70%. For small and medium-sized sellers who take the route of small profits but quick turnover, not only will their profit margins be greatly compressed and their price competitiveness reduced, but they may also find it difficult to maintain current prices and face the risk of losses.

2. Increased logistics costs

In fact, the United States is not only imposing tariffs, but also plans to add new shipping service charges for Chinese ships, charging not only for the services of Chinese shipping operators, but also for the services of shipping operators with fleets of ships built in China. It is conceivable that shipping operators cannot bear the increased costs themselves, but will pass the costs on to sellers.

3. Supply chain management becomes more difficult

Many merchants who take the low-price route rely too much on a single supply chain in their own country. Frequent changes in tariff policies make it difficult for merchants to make quick adjustments. In addition, low-value-added products lack market competitiveness, which makes it more likely to result in inventory backlogs, slower delivery and other results.

Ⅱ. What should sellers do?

1. Calculate costs carefully

The specific circumstances of changes in tariff policies are often not that simple. Different levels of tax requirements will be made for some categories. You can check the HTS code of the product on the official website of the U.S. International Trade Commission to see if the product is on the additional tariff list, or use third-party tools to scan product categories and make more specific price adjustments.

2. Increase added value

There are commodities that are most affected, and there are more risk-resistant commodities, such as branded products, DTC (direct to consumer to reduce intermediary costs) products and high value-added products. These products have a larger premium space, are relatively more competitive, and are more able to withstand the impact of increased tariffs.

3. Logistics localization

The increase in tariffs will inevitably lead to a rise in logistics costs, and models such as direct mail and small packages will be negatively affected. Switching to overseas warehouses or local warehouses that are not affected by the policy can effectively avoid the impact, while also improving delivery efficiency and optimizing consumers' shopping experience. In addition, the country is also supporting the overseas warehouse model through policies such as departure tax refunds, which is also good for sellers' capital flow.

4. Multi-point layout and stability of stores

The supply chain cannot rely on a single region, and the store distribution cannot rely on a single market. To share risks, the most common and effective method is to have a multi-site layout, which can help further increase revenue if operated properly. However, multi-store strategies are often accompanied by association risks. In order to prevent the risk of being implicated by association and maintain the normal operation of the store, the IPFoxy proxy can be used for precise positioning and environmental isolation, and one store and one IP can be used to achieve efficient store anti-association, which is also conducive to localized and differentiated operations.

Ⅲ. Final Thoughts

The situation in the cross-border e-commerce industry is unpredictable. Improving competitiveness and refining and localizing operations are necessary methods to adapt to the general trend.