Navigating the new tariff reality: What ecommerce brands need to know

Just how dramatic are the changes hitting ecommerce right now?

We recently brought together some of the industry’s leading voices to find out.

Their verdict? “This has been absolutely insane,” says Brian Burke, Chief Commercial Officer at SEKO Logistics. “This is as close to the global financial crisis as well as the start of the global pandemic as you can possibly get as far as disruption.”

Recent changes to U.S. trade policy are forcing brands to rapidly reassess their supply chain strategies and international operations. With tariff rates reaching 145% on Chinese goods and fundamental changes to de minimis rules, the industry faces what many experts are calling an unprecedented transformation.

The timing of these changes also coincides with challenging consumer conditions. As Justin Sherlock, CEO and founder at duty drawback platform Caspian points out: “Credit’s kind of maxed out right now, charge-off rates on credit cards are at all-time highs, interest rates on credit cards are at all-time highs, mortgage originations are at a low.“

This consumer weakness makes it particularly challenging for businesses to pass on increased costs, requiring more sophisticated strategies for managing the impact of higher tariffs.

So what are supply chain and ops leaders to do?

There’s really no one-size-fits-all approach. The panel discusses bonded warehouses and free trade zones; going global in pursuit of further diversification; and even sitting back to see where the cards fall before making any quick moves.

Here’s what else we know.

The impact is already visible

The effects are already rippling through the industry, creating immediate and dramatic changes in shipping patterns.

Ocean bookings from Asia to the U.S. have plummeted as retailers delay non-critical freight. According Sherlock, “March was a great month for ocean rates and ocean bookings because everyone was trying to stockpile inventory…that’s gonna completely pause and shipping is gonna go on hold for the next month as everyone waits to see what's gonna happen with their tariff rates.“

The impact extends beyond just shipping volumes: Shopify merchants have already begun responding to the anticipated changes, with April 2nd and 3rd seeing the highest price change events of 2025 at the time of the panel, crossing 5 million price adjustments per day. This level of price volatility reflects the immediate response of businesses trying to adapt to the new reality.

The stakes are high

For many businesses, these changes aren’t just about adjusting prices—they’re about survival.

Alex Yancher, co-founder and CEO of Passport Global, points to analysis suggesting current tariff rates on Chinese goods are effectively creating “not a tariff, but an embargo.” The implications for businesses are severe, with some facing potential bankruptcy due to unexpected duty obligations.

The challenge is particularly acute for businesses with established supply chains in affected regions. “I spoke to one customer that is importing goods for the wholesale business by boat,” shares Izzy Rosenzweig, CEO of Portless. “They’re about to get hit with a close to a million dollars tax bill. They don’t have a million dollars put aside for that tax bill.“

The situation is further complicated by marketing implications. As Rosenzweig explains, “Raising prices isn’t simple, because very often customers are leveraging platforms like Meta or Google or TikTok. If you just raise prices by 30%, your conversion rate goes down, then your CAC goes up. So it’s not always as simple as the consumer is going to pay the price.”

The revenue strategy behind the changes

The panel agreed that understanding the administration’s motivation is crucial for anticipating future developments.

As Yancher explains, “We know that this administration is focused on tariffs as a revenue generating source. They want to cut taxes, do a stimulus, and they want to use this tariff revenue to pay for it.” The target? To increase tariff revenue from $100 billion in 2024 to between $300-600 billion.

This dramatic increase implies a fundamental shift in trade policy, with tariff rates potentially expected to rise between 3 to 6 times their current levels. The baseline is anticipated to be approximately 10% minimum, likely ranging between 10% and 20% for most countries, with China facing significantly higher rates.

Strategic options for brands

While the situation is challenging, experts suggest several strategies for brands to consider:

1. Diversification of markets

“The time to go global is right now,” advises Burke. “You need to look at Argentina, go hard after Europe, go hard after Australia.” The current climate presents an opportunity for U.S. brands to expand internationally rather than solely focusing on domestic markets.

Burke emphasizes that this isn’t just about survival but opportunity: “These brands have been selling into the US market for 15 years. It’s not just the big marketplaces out of China. These are big brands that have been selling into the US market for years. They’ve been leveraging their supply chain. Use this as the ‘tables are turning’ opportunity.“

2. Supply chain optimization

Several approaches to supply chain optimization are emerging:

• First sale rule implementation: Rosenzweig details how brands can potentially reduce their duty liability: “Very often factories have a Chinese entity and a Hong Kong entity. First sale law allows you—if you use a third party, usually an accounting firm—to separate some of those line item costs from the factory.“
• Bonded warehouses and free trade zones: While these options present opportunities, they come with their own challenges. As Yancher notes, “Whatever fulfillment fees you have right now, they’re just gonna be way higher in a bonded section of a warehouse because you have to have special certified employees.“
• Duty drawback programs: Sherlock notes that “it takes several months to get a duty drawback program set up,” but that “these are things that you can do that don't change your operations.”

3. Careful planning over rushed decisions

The experts advocate for measured responses rather than hasty changes. “For supply chain manufacturing hubs, any major shift of manufacturing is a huge risk,” notes Rosenzweig. He shares a cautionary tale: “There was one brand I was talking to that was in the bike business in 2016 when Trump's first 301 came out. A lot of the competitors moved to other countries. They decided to stay and slowly raise their prices. They end up eating their market share and their business model, because they had the best quality.“

Where do we go from here?

While uncertainty remains the dominant theme, the consensus among industry leaders is that brands should use this period to educate themselves about alternatives while optimizing their current operations. As Sherlock advises, focus on “things that preserve flexibility and give you paths to cost cutting.”

The coming months will be crucial as new policies take effect and the industry adapts to what Burke describes as “navigating through a haunted house while blindfolded.” Success will likely come to those who can balance immediate adaptations with strategic long-term planning, while maintaining the flexibility to respond to further changes in the regulatory environment.