January 2025: What We Know About Pending Tariff Changes for DTC Brands

Shipping container delivering goods from overseas.

Last Updated: January 27th

As the global trade scene continues to change, eCommerce brands that source products from overseas are facing new challenges with the upcoming 2025 tariff increases. The Trump administration's proposed tariff increases for 2025 are set to significantly impact imports from major sourcing partners, including China, Canada, Mexico, and Europe.

If your eCommerce brand sources products or materials from overseas, these tariffs can have a major impact on your cost and supply chain logistics, not to mention your customers and bottom line.

How are eCommerce brands supposed to navigate these changes and stay competitive?

With rising costs, evolving regulations, and potential supply chain disruptions, staying proactive is more important than ever. In this guide, we're uncovering the key ways tariffs are impacting eCommerce brands today and proving 4 strategies to help protect your bottom line. 👇

Simply put, tariffs are taxes that governments impose on imported goods. Countries often use them to protect domestic industries or respond to trade disputes.

Recently, world events and changes in the U.S. administration has caused tariffs to be tacked on to imports from key countries to slow dependency on the foreign supply chain. If your eCommerce business relies on international suppliers, these tariffs could mean higher costs that trickle down to your pricing strategy and profit margins.

Local businesses and consumers ultimately pay tariffs on imports. While governments impose tariffs on imported goods from foreign contries, it's the businesses that import those goods, not the supplier, that bears the immediate financial burden.

Businesses often need to choose between absorbing extra costs or raising prices for customers to offset increased tariffs. In many cases, companies pass higher costs down to the consumer.

In 2025, the United States is set to implement significant tariffs on imported goods shipped from key manufacturing countries. Here's a breakdown of the anticipated changes as of January 2025:

China

Proposed Tariff: Up to 60% on all Chinese imports.

Key Affected Products: Consumer electronics, electrical machinery, fashion goods, footware, and pharmaceuticals.

Canada and Mexico

Proposed Tariff: 25% on imports from both countries.

Key Affected Products: Automotive parts, vehicles, gasoline, and various consumer goods.

European Union

Potential Tariff: Under consideration, with specific rates yet to be determined.

Key Affected Products: To be determined.

Global Tariff:

Potential Tariff: A universal tariff of 10% to 20% on imports from all other countries is under consideration.

Key Affected Products: Apparel, toys, furniture, groceries, household appliances, footwear, and travel goods.

A United States global tariff on imports could cause higher prices across electronic, apparel, beauty, and houseware industries.

New tariffs on imports bring a handful of challenges that e-commerce businesses need to anticipate and find solutions around quickly.

Here are the top ways tariffs may impact your eCommerce operations:

When tariffs are introduced, it's not just importers who feel the pinch—those added costs tend to trickle down the entire supply chain. From sourcing materials to final retail pricing, every step in the process can be affected.

When faced with higher product costs inflicted by tariffs small businesses need to consider:

• Will increasing my retail prices scare off customers?
• How can I adjust my budget to account for lower profit margins?
• Will I be at a competitive disadvantage if my competition sources from tariff-free regions?

Sudden tariff hikes can throw supply chains into chaos, leading retailers scrambling to find new suppliers to avoid hightened fees. This can bring on a domino-effect of challenges for eCommerce brands:

• Drawn-out supplier transition: Vetting manufacturers, negotiating contracts, and ensuring quality standards can take months—if not longer.
• Product availability issues: Customers may face delays or unexpected changes in product quality during the transition.
• Losing trusted relationships: Switching suppliers can mean sacrificing long-standing partnerships, and the communication channels, streamlined processes,and product consistency that comes with them.

While you can't control tariffs, you can take action to reduce their impact.

Tariffs can go into effect at any time and waiting to react isn't a strong option. Being proactive can help minimize financial strain, streamline operations, and even reveal new growth opportunities.

If you supply products from countries with high import tarrifs like China, it's crucial to start exploring manufacturers in regions with lower or no tariffs.

Since the vetting process can be lengthy and building relationships takes time, getting started now can give you a competitive advantage when the need to switch arises.

Consider the following options:

• Southeast Asia: Countries like Vietnam, Thailand, Cambodia, and Malaysia offer competitive labor costs and favorable trade agreements with major markets.
• Domestic Manufacturing: While potentially higher in cost, producing goods locally can provide faster turnaround times, better quality control, and a "made locally" marketing appeal that resonates with customers.
• Nearshoring Opportunities: Exploring suppliers in nearby regions, such as Mexico or Canada, can reduce logistics complexity and shipping costs while maintaining supply chain flexibility.

Taking a proactive approach in diversifying your supplier network can help safeguard your business from sudden tariff changes and keep your operations running smoothly.

Having a strong handle on your inventory levels, demand forecasting, and sell-through data can significantly reduce the impact of tariffs on your business. Knowing exactly what’s in stock and how fast products are moving allows you to:

• Avoid unnecessary overstocking or running out of key items.
• Plan purchases strategically to take advantage of lower tariff periods.
• Leverage bulk purchasing to offset costs.

Additionally, leveraging real-time inventory insights can help you:

• Pivot quickly if tariffs change suddenly.
• Adjust purchasing patterns and distribution strategies on the fly.
• Stay agile and protect your margins.

Partnering with a fulfillment provider, like Nice Commerce, that offers detailed inventory analytics and demand forecasting can give you the visibility you need to make data-driven decisions.

Unfortunately, even after exhausting all other efforts, raising your product's prices may be unavoidable when faced with high tariff costs. However, the way you communicate these changes to your customers can make all the difference.

• Transparency is key—let your customers know why prices are increasing and how you are working to maintain the same quality and service they expect.
• Consider framing the increase in a way that emphasizes the value they are receiving, such as highlighting product improvements, sustainability efforts, or enhanced customer service.
• Let them know what exciting things are on the horizon for your brand. Sharing upcoming product launches, enhancements, or behind-the-scenes insights can build anticipation and strengthen their connection with your brand.
• Bundle complementary products together to create added value for customers while keeping costs in check. Thoughtful bundling can enhance the perceived value of your offerings, making customers feel like they’re getting more for their money without significantly impacting your bottom line.

Finding manufacturers in Southeast countries like India, Malaysia, or Cambodia can help eCommerce brands avoid high tariffs.

A 3PL partner who understands the ins and outs of inventory management, supply chain efficiency, and cost optimization can help eCommerce brands navigate the complexities that increased tariffs bring.

Nice Commerce offers a range of solutions that can help your eCommerce business stay resilient, including:

• Real-Time Inventory Insights: Our advanced analytics can provide you with up-to-the-minute visibility into your stock levels, demand patterns, and sell-through rates. This data allows you to make informed purchasing decisions, avoid overstocking or stockouts, and better align your operations with fluctuating tariffs.
• Sales-Ready Product Prep & QA Assistance: When switching or vetting new manufacturers to avoid tariff-heavy regions, ensuring quality and compliance can be challenging. Our team provides thorough product inspections, labeling, and kitting services to ensure your products meet the highest standards before reaching your customers.
• Fulfillment Cost Optimization: Nice Commerce helps offset rising operating costs with strategic DTC and B2B fulfillment solutions designed to maximize efficiency and minimize expenses. By negotiating competitive carrier rates, optimizing packaging to reduce dimensional weight fees, and ensuring compliance with marketplace and retailer requirements, we help you streamline operations and cut unnecessary costs.

Dealing with tariffs isn’t fun, but they don't have to derail your e-commerce business.

With the right strategy, you can navigate these challenges and even uncover opportunities for growth. Staying informed about policy changes, optimizing your supply chain, and working with reliable partners can help you stay agile and competitive.

Whether it's exploring alternative suppliers or fine-tuning your pricing model, taking a proactive approach will ensure your business remains resilient and ready to adapt to whatever comes next.

President Donald Trump is proposing new tariffs in 2025 in an effort to protect domestic industries and address trade imbalances. However, critics warn tariffs can lead to more trade tensions and affect global economic stability through increased prices.

Industries like electronics, apparel, and consumer goods tend to feel the most pressure due to their heavy reliance on overseas manufacturing.

It depends. First, look into ways to decrease costs elsewhere in your supply chain or find manufacturers in tariff-free countries. If you're unable to avoid a price increase, make sure to communicate the added value to your customers and explore creative pricing strategies like bundling or subscriptions.

The full impact of tariffs on consumer behavior and pricing strategies is still unfolding, especially with recent developments in U.S.-China trade negotiations. If tariffs persist, online retailers will likely experience similar challenges in adjusting their pricing and maintaining customer demand.

Diversifying suppliers, improving logistics, finding cost-saving measures in other areas of your supply chain, and exploring tariff refunds are all great ways to keep costs down.

Southeast countries like Vietnam, Thailand, Cambodia, and Malaysia offer competitive labor costs and favorable trade agreements with major markets.

Domestic manufacturing in the United States, while generally higher in cost, can provide faster turnaround times, better quality control, and a "made locally" marketing appeal that resonates with customers.