The President of the United States, Donald Trump, has announced new tariff measures imposing rates of 10% on all imports from any part of the world, and additional specific rates that elevate them up to 20% on European products, 10% on British products, 24% on Japanese products, and up to 34% on Chinese products. In the case of China, moreover, these tariffs will be added to the previous 20%, reaching a striking 54%.
These measures, unprecedented in recent history, will strongly impact the global economy and may trigger a tariff war that drives up prices worldwide. Of course, as you might have imagined, the increase in tariffs will also have significant repercussions on eCommerce. Let us see what those might be.
To begin with, the new tariffs pose significant challenges for European sellers exporting to the United States. Categories such as fashion, food, and beverages (especially wines and oils) could experience a considerable increase in their operational costs, which could translate into less competitive prices and a potential loss of market share to local competitors in the U.S. or from other countries with more favorable agreements.
This is, by the way, one of the least explored ramifications so far of this entire array of measures. The 20% tariffs applied to the EU are very significant, but they are less so than the taxes on other countries that may be considered competitors of European products in some sectors. China (54%), Japan (24%), or South Africa (30%) are currently in a much worse position when selling in the North American market.
Another problematic ramification for European companies will affect the sellers bringing Chinese products to the U.S. market.
These companies will face very high tariffs (44% initially and up to 54% after April 9), which will force them to raise consumer prices, directly affecting competitiveness compared to local or lower-tariff region providers.
If they choose not to pass the entire cost increase to the consumer to remain competitive, they will have to absorb part of these additional costs, drastically reducing their profit margins and the business’s sustainability. Additionally, it is foreseeable that customs processes will become more complex, implying an increase in operational costs, delivery delays, and increased administrative management to comply with the new regulations.
As we mentioned, European companies could find opportunities in this new, complex landscape. With Chinese products facing higher costs in the U.S. market due to tariffs, European products could become more competitive in terms of price. European sellers might take advantage of reduced Chinese competition in the U.S. to expand in this market, especially in sectors such as fashion, luxury, and technology. It is still a mere hypothesis, but Amazon, eBay, and other American platforms might encourage the sale of European products to compensate for the decreased availability of Chinese goods.
Moreover, American consumers might seek alternatives to Chinese products, opening a window for European companies to increase their market share in the United States.
In the United States, although the measures aim to protect local producers, they could also generate negative consequences. American eCommerce heavily depends on imports to maintain a diversified offer and competitive prices. Platforms like Amazon or Walmart could see their operational margins affected, forcing them to increase prices for consumers.
Apart from the array of new tariffs, a key aspect of the measures announced by Trump is the elimination of the de minimis exemption for imports from China. This exemption allowed duty-free entry for low-value shipments (under $800). The elimination of this exemption will directly affect marketplaces dependent on low-value Chinese imports, like Shein and Temu, which used this exemption to avoid tariffs and offer competitive prices in the U.S. market.
Thus, starting May 2, goods valued at $800 or less previously exempt from tariffs will be subject to corresponding fees. Items sent by international mail (something widely utilized by some popular Chinese marketplaces) will be subject to a 30% tariff on their value or $25 per item, whichever is greater. This fee will increase to $50 per item after June 1, 2025. Carriers must report the shipment details to U.S. Customs and Border Protection (CBP) and maintain a bond to guarantee the payment of tariffs.
This could lead to a reduction in consumption, particularly affecting technology and textiles, areas strongly dominated by Asian and European imports. Additionally, small traders and eCommerce startups might face greater difficulties absorbing additional costs, limiting their ability to compete.
Globally, the measure could trigger tariff reprisals from the European Union, China, and Japan, creating additional trade tensions that would impact the stability of international trade. An escalation in tariffs could lead to a contraction in global eCommerce due to the generalized increase in costs.
International platforms operating in multiple markets will face increasing logistical and regulatory complexities, which could slow down the growth of global eCommerce in the short term.
As you can see, these measures could entail a profound change in the eCommerce ecosystem, encouraging the search for local suppliers and accelerating processes of regionalization and relocation of supply chains.
Image: ChatGPT
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