As President Donald Trump has announced his imposition of tariffs on imports from Canada, Mexico and China, online retailers in the United States are considering the financial impacts on their ecommerce businesses.
President Trump has implemented a 25% additional tariff on imports to the U.S. from Canada and Mexico. For imports from China, it’s a 10% additional tariff.
In 2024, the U.S. imported $412.7 billion worth of goods from Canada, according to government data. It imported $505.9 billion worth of products from Mexico. From China, that figure was $438.9 billion.
That’s a combined $1.36 trillion in imports from the trio of trade partners. And for each of the three countries, the U.S. imports at least $50 billion worth more than it exports.
Then, on Feb. 10, President Trump “signed proclamations to close existing loopholes and exemptions to restore a true 25% tariff on steel and elevate the tariff to 25% on aluminum,” according to a government fact sheet.
Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine and the United Kingdom had received exemptions that prevented the tariffs from being effective, according to the fact sheet.
These tariffs will matter to ecommerce and brick-and-mortar businesses alike, leading many retailers to raise prices to keep margins profitable. But there are other ways retailers will respond to tariffs, too.
How do tariffs affect ecommerce businesses?
During President Trump’s first presidency, online retailer Full Leaf Tea Company felt the impact of the tariffs he imposed at the time, co-founders Matt and Lisa Hammonds told Digital Commerce 360.
“In his first presidency, when those happened, we had a big shipment of tins and then that got caught with a big tariff, so that was probably the biggest impact we’ve had from it,” Matt Hammonds said.
“But this year, most of our packaging, things along those lines, we have made in the U.S.,” he added. “We’ve tried to prepare ourselves to not have the tariffs affect us too much.”
Full Leaf Tea Company sources its organic-certified herbs, teas and spices “from all over,” he said. As a result, he said, the new wave of tariffs on products from China could affect the company, too.
“We don’t source anything from Mexico or Canada, not for any other reason other than they just don’t grow the stuff that we order,” he said.
Still, the effect of the tariffs on Full Leaf Tea Company’s ecommerce business might not become evident until the retailer begins sourcing more of its products, Lisa Hammonds said.
“I think I may see it next year when we start contracting again for the different herbs and things that are coming in, because right now, we’re already pretty well set from ordering and doing all of our contracting beforehand,” she explained. “If anything, I really see the big impact more or less coming toward the end of this year as we prepare for 2026.”
How ecommerce retailers can get ahead of tariffs
On the top line, retailers will have to raise prices to keep up with their margins, according to Susanna Tuan, who works on partnerships for Loop Returns, a returns management software provider. But she added that retailers have more to worry about than just pricing when it comes to tariffs.
On the bottom line, she said, retailers will have to diversify their supply chain and identify “holes and leaks, where you are losing money or spending money recklessly.”
In Full Leaf Tea Company’s case, it seeks to diversify its supply chain for more reasons than tariffs, Matt Hammonds said.
“We do have several U.S. distributors that help source some of our items as well,” he said. “We really tried to diversify in our sourcing to have multiple sources for different ingredients, things along those lines, ‘cause especially when it comes to things that are grown, you can have bad farm seasons that can really affect our supply.”
Diversifying supply chains also means retailers working with fulfillment partners to ensure they can meet delivery needs.
For example, Jason Brenner, senior vice president of FedEx‘s digital portfolio, told Digital Commerce 360 in an email that the carrier remains “focused on supporting our customers and working with them to adapt to the substantial changes resulting from the recent tariff announcements.”
“FedEx has an experienced team of clearance and compliance experts who are working around the clock to continue enabling the movement of shipments across borders of the more than 220 countries and territories we serve,” Brenner said.
Tariffs add uncertainty to retail operations
Tuan said the ecommerce brands she works with struggle with uncertainty over which countries U.S. tariffs may target next, at what rates and when. Even a diversified international supply chain could struggle, depending on which countries are hit with tariffs, potentially leading retailers to rely more on domestic product sourcing.
When the president initially mentioned implementing tariffs, “You had a bunch of brands originally panicking, and then it went on pause, and so they kind of said, ‘Okay, I think we’re good. I think we’re good.’ And you do that like 10 times. If you’re a brand, at this point, you’re realizing I at least need to have a plan.”
Overall, tariffs are causing “complete whiplash” among ecommerce retailers, Tuan told Digital Commerce 360. Especially in the short-term, she said, it’s “just a lot of chaos.”
She said the thinks a lot of brands are modeling out different scenarios. In a best-case situation, she said, the tariffs get pulled back and ecommerce brands can exhale a sigh of relief. And in a worst-case scenario, she said, the U.S. upholds its decisions to impose tariffs and is in turn hit with retaliatory tariffs.
Retailers employing de minimis shipments to see impact of tariffs
The tariffs on China will have a disproportionate effect on merchants such as Shein and Temu, which benefit from the de minimis rules on imports. In June, the U.S. Customs and Border Protection (CBP) announced new action as part of an effort to curb exploitation of de minimis rules for small-value ecommerce orders.
How CBP proceeds could have implications for international retailers, including China-originated shipments ordered through Shein and Temu. As of 2016, the rule allows for a single person to import items with a total value of up to $800 without formal customs declarations.
“Temu and Shein alone are likely responsible for more than 30% of all packages shipped to the United States daily under the de minimis provision, and likely nearly half of all de minimis shipments to the U.S. from China,” claimed a 2024 report by the U.S. House Select Committee.
Shein is No. 2 in Digital Commerce 360’s Asia Database. The database ranks online retailers in the region by their annual ecommerce sales. PDD Holdings owns Temu, which launched in 2022 and isn’t yet reflected in the database.
“$800 is a ton of products online,” Tuan said. “That’s pretty much anything other than luxury fashion if you’re thinking about one order. It doesn’t necessarily need to be a Temu or a Shein, fast-fashion, in order for a brand to take advantage of that.”
However, potential changes to the de minimis rule, in conjunction with tariffs, would play a direct role in international ecommerce orders to the United States.
Are small businesses more affected by tariffs?
Brands with higher average order values will be less affected by tariff markups, Tuan said.
“You’re going to have a lot more of those larger retailers weather this storm, whereas it’s unfortunate but the independent shops and stores are going to be far more at risk,” she said.
She gave the example that consumers will better stomach retailers tacking on an extra $25 to cover tariffs for a cart size upward of $500, as opposed to buying a $15 product that would cost about $30 as a result of tariffs.
This is also part of a larger trend of inflationary pressures, she said. Businesses with economies of scale can keep their prices down.
“At the end of the day, operations, supply chain is real, it’s slow-moving, it’s highly dependent on so many different pieces,” Tuan said. “And so you have these brands that have scaled the front end tremendously and made their sites very advanced, their marketing strategies, their product launches extremely advanced and creative.”
In the meantime, businesses are taking note to see how high tariffs go and how they factor into long-term plans.
“But at the end of the day, shipping products from one destination to another, returning products overseas, it hasn’t changed much,” she assessed. “It’s still something that you can’t change overnight.”
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