Tariffs. Again.
We hesitate to address the topic of trade tariffs, a critically important issue for e-commerce companies that seems to change on a daily basis.
But as they are such an integral part of everyday business, it’s important to update online merchants of current information to make your operation as successful as possible.
Trade became a central issue in the 2020 United States presidential election, and though it seemed undefined, the current president appears devoted to changing the trade balance through application of broad tariffs for imported goods. Whether you run an e-commerce business in the States or anywhere else in the world, it’s likely you will be impacted.
A staple in reselling goods is stability; the predictability of understanding your inventory costs. That seems to be in disarray in the current state of tariff uncertainty, and both brick-and-mortar and online sellers are rightly concerned.
As countries iron out ever-changing trade deals, instability haunts all sellers. The reality is that a good chunk of your inventory comes from China, the country in the crosshairs of an administration determined to strengthen tariffs. A figure of 145 percent was floated for imports from China, a number arguably unsustainable to the point of representing an actual trade embargo. Lightly full or even empty shipping ports have proven this to be true, a fact that has economists gravely concerned.
In ongoing trade talks and changing demands from the US, tariff issues have left cargo either unsent or stalled at ports of entry. Navigating this as a retailer/reseller must be resolved if you hope to keep your business alive. And as reciprocal tariffs impact the ability to send your goods abroad, or to Canada and Mexico, it’s essential to keep tabs on developments unfolding.
A glimmer of hope
As of mid-May, talks with China may drop the China import tariff rate to 30 percent – much lower than the original figure, but still a possible obstacle in your profitability. Buying local has been a talking point for decades, and yet the accessibility of domestic goods is not viable.
The nature of your business may not be severely hampered by this sudden tariff blitz. Or it may be devastating. An obvious tip is to search for locally sourced goods, but it’s clear that your competitors are pursuing that same avenue. Note that China has attempted an end-run to the rigid US policy by manufacturing goods and routing them to other countries with lower US import tariffs.
If you’re flexible enough to shift to a more affordable line of products, that should be a goal. If you’re rooted in an unchangeable product, you may need to approach business operations from the crisis mode most experienced during the Covid-19 pandemic.
There are several sources for accessing specific advice tailored to your business. This piece from Digital Commerce 360 is a great place to start.
We wish you good luck and much success.
Photo by Paul Teysen on Unsplash