U.S. tariffs on Chinese imports have skyrocketed to as high as 145% for some products, following President Trump’s dramatic escalation from 34% to 84% and then to 125% in early April 2025. “On April 8, 2025, in response to China’s 34% retaliatory tariff announced on April 4, President Trump increased the reciprocal tariff on Chinese imports from 34% to 84%, effective 12:01 a.m. on April 9, 2025… Following the Chinese announcement, President Trump said that he would now raise the tariff charged to China by the United States to 125%, effective immediately,” according to a legal alert published last week.
The tariff increases represent the latest development in the ongoing trade tensions between the world’s two largest economies, with immediate consequences for businesses and consumers. E-commerce platforms Shein and Temu have already announced price increases effective April 25, 2025, due to higher operating expenses.
Adding to the pressure, the duty-free de minimis provision that allowed goods valued under $800 to enter the U.S. without tariffs is being eliminated. “I further declared pursuant to Executive Order 14256 of April 2, 2025 … that duty-free de minimis treatment on articles described in section 2(a) of Executive Order 14195 is no longer available effective at 12:01 a.m. eastern daylight time on May 2, 2025,” states a White House amendment to the tariff policy.
This change will particularly impact e-commerce businesses that rely on low-cost goods and rapid delivery. Many companies now face compressed profit margins, forcing them to increase consumer prices or find new suppliers.
The most affected product categories include consumer electronics like smartphones and laptops, apparel and footwear, automotive parts, and machinery and tools.
Yet despite these pressures, Chinese sellers have maintained dominance in online marketplaces. “Over 50% of top sellers on Amazon are from China, up from less than 40% in previous years,” reports Yale University’s Budget Lab, attributing this to manufacturing proximity, government support, and sophisticated marketplace strategies.
U.S. domestic e-commerce businesses aren’t faring as well. Many face cash flow difficulties and even bankruptcy risks due to the increased tariff costs.
Retailers have also shifted their communication strategy, now bluntly telling customers that price increases are directly tied to tariffs—a departure from traditional consumer messaging approaches.
In response to the tariffs, many companies are looking beyond China. They’re increasingly shifting their sourcing to alternative suppliers in countries like Vietnam and India.
Consumer behavior is changing too. With higher prices, Americans are increasingly preferring domestic alternatives or turning to used goods.
The elimination of the de minimis exemption will have widespread effects. “Over $1 billion worth of goods entered the U.S. under this exemption in 2023, with an average shipment value of $54,” notes the Yale analysis.
The financial impact on American consumers has been substantial. “The 2018 tariffs led to $3.2 billion in additional monthly costs for Americans,” the researchers found.
Rather than bringing manufacturing back to the U.S., the tariffs have primarily redirected trade flows. “Tariffs have led to trade flow redirection rather than repatriation of manufacturing, with companies using complex workarounds,” states the Budget Lab report.
Economists point to broader economic consequences as well. “The tariffs have resulted in significant deadweight welfare losses, reducing economic activity due to market distortions,” the research concludes.
Ultimately, it’s American consumers who bear the brunt of these policies. “Tariffs generally result in increased prices for American consumers, with the cost burden often passed on from exporters to importers and consumers,” the Yale economists explain, suggesting that the true impact of these escalating tariffs may not be fully realized for months to come.