Tariff Whiplash is Rewriting the Rules for Cross-Border Ecommerce
In the span of a few months, the rules of global ecommerce shifted—again.
In early 2025, the U.S. announced sweeping tariff changes: a sharp escalation on Chinese imports from 25% to 145%, new proposed tariffs on European goods (later delayed to July 9 after EU intervention), and plans to eliminate the de minimis exemption—a rule that allowed shipments under $800 to enter duty-free (which is already in effect for China and Hong Kong).
Ecommerce brands are finding themselves in the blast zone of unpredictable trade policy.
They’re dealing with shipping friction, checkout confusion, and a sudden need to rethink how and where they grow.
One Canadian founder, whose sparkling water brand was doing 50% of its DTC business in the U.S. last year, put it bluntly:
“I’ve actually stopped shipping to the U.S. until the dust settles… and that was half my revenue,” shared Juliana Casale, founder of Balloon Sparkling Water.
For entrepreneurs like her, tariffs are forcing a total rethink of international strategy.
Global demand is there. The path to go global is not.
The appetite for international growth hasn’t gone away.
In fact, it’s stronger than ever.
According to Passport Global’s 2025 Ecommerce Leader report, 91% of ecommerce decision-makers say international sales remain a profitable revenue source.
But despite that optimism, many are slowing down—not because they want to, but because they feel they have to. When asked about the biggest challenges to global expansion:
- 42% pointed to the complexity of entering new markets
- 38% cited high operational costs
- 37% named duties and tariffs as a primary blocker
It paints a clear picture: the opportunity is there, but the friction is growing faster than most brands can scale.
And the impact isn’t limited to strategy meetings or postponed launches. It’s showing up in pricing, too. An Allianz survey of over 4,500 companies across nine countries found that:
- 54% are raising prices because of tariffs
- Just 22% said they can absorb the cost
Whether or not the tariffs are finalized, paused, or delayed, their presence is already affecting margins, customer experience, and consumer trust.
The $800 rule that made DTC work… is gone.
For years, the Section 321 de minimis rule allowed U.S. consumers to receive goods under $800 without paying import duties.
It was a game-changer for international ecommerce: cross-border sellers could ship into the U.S. without getting hit with the exact costs as traditional importers.
That exemption is now under serious threat.
This policy shift is allegedly about strengthening domestic manufacturing. In practice, it’s pulling the rug out from brands that scaled using this very rule—and often built their entire customer experience around it.
“The reason I was able to sell to the U.S. was because of the de minimis exemption,” said Juliana. “Now that it’s planning to go away—and on top of that, there’s a 25% tariff on Canadian goods—my profits are going to go down drastically.”
She’s not alone.
Steven Borrelli, CEO of CUTS Clothing, wrote an open letter on X to President Trump explaining how critical the de minimis exemption had been for his bootstrapped brand—and how damaging its removal would be without time to adapt.
“Removing 321 de minimis at the same time as increasing tariffs on China from 25% to 145% will be the death of thousands of ecommerce companies,” he wrote. “We need time to adjust—at least 9 to 12 months—to set up new manufacturing and pursue U.S. production.”
Juliana shared a similar concern. Even though she sources ingredients and manufactures locally in Canada, her suppliers aren’t immune to global shifts. One notified her of a 2-cent increase per can—a small bump that adds up quickly for an early-stage beverage brand.
“I don’t know if that’s directly because of tariffs,” she said, “but it’s probably a trickle-down effect,” she explained.
What Juliana and Steven captured is a common thread running through many brands’ reactions:
Global ecommerce supply chains don’t pivot overnight.
There’s no doubt that brands in scale-up mode are scrambling to deal with these changes, but what about the retail giants?
Are bigger retailers getting bigger advantages?
As small brands scrambled to make sense of the new rules, a different pattern began to surface—one that triggered a wave of frustration across founder circles.
In May, Dave Rekuc, founder and CEO of Bambu Earth, pulled data that showed a sharp uptick in ocean freight shipments from China by Walmart, Target, and Home Depot, starting just weeks before the White House extended the EU tariff deadline and appeared to slow-roll enforcement on other fronts:
“It very clearly starts surging for all three from April 9 lows by late April, early May. By late April, Walmart was placing orders again and even agreeing to ‘eat’ the tariffs for a deal they knew was coming.
This is disgusting,” he shared on X, along with a visual:

This raised eyebrows among independent operators—many of whom received little to no guidance about enforcement deadlines.
Founder and investor Molson Hart posted a five-point breakdown that quickly gained traction:
His takeaway:
If large corporations had insider access and used it to front-load imports while smaller businesses were left in the dark, the system is unfair.
“Giving Walmart 20 days' advance notice and not telling small businesses is abhorrent,” Molson added in a follow-up post. “This is worse than I realized.”
Of course, no large retailer or the White House has openly admitted this.
Whether the freight surge was strategic forecasting or something more coordinated, the result was the same: SMBs were caught flat-footed while their largest competitors shipped in record volumes—and still ended up raising prices for consumers.
Consumer trust is eroding, even before tariffs fully hit.
Even before the full weight of these policies has landed, consumers are already reacting.
Net economic sentiment dropped significantly when tariffs were announced, according to a chart from Steve Rekuc, one of the contributors to the DTC Index. That trend, shaped by inflation fatigue, higher interest rates, and now tariff-induced price hikes, is shaping how shoppers behave.
However, when the Trump Administration suddenly put tariffs on “hold” for extended periods, sentiment went up.
As Steve shared, “Less tariffs = more confidence in the economy. But do not mistake this for consumers' confidence in purchasing; there are other metrics to consider.”

For some brands, the damage isn’t just in the pricing. Juliana described how even if she decides to eat the costs of the tariffs, the experience of the customer is still… unpleasant to say the least:
“I have a transportation company called ClickShip, and they have a portal where you can look at the prices of different carriers and pick the one that you want to go with. Usually, you have the option of saying either duties or taxes are taken on by the sender or the recipient, but now they're defaulting to the recipient being responsible for any import taxes or duties,” she explained.
That means even if she wanted to absorb the cost herself, customers would still be asked to pay something on delivery before their package was released—creating surprise fees, delays, and added support overhead.
“And do I have to worry about whether people are saying that they had to pay duties when they didn't? I don't really know how to handle it. I've just stopped shipping to the US altogether. That's been a big mess for me.”
No matter what, the result is the same: shipping to the US causes friction in the buying experience that the customer will remember.
This kind of breakdown erodes trust and increases support overhead. As Spencer Hakimian put it on X:
This was in response to Walmart saying it plans to increase prices, which came as a shock to consumers after they were told it was going to “eat the costs.”
What brands are doing now: localize, reroute, rebuild.
Rather than wait for tariff policy to stabilize, many ecommerce companies are taking matters into their own hands.
A recent report from Passport Global found that 81% of ecommerce decision-makers are concerned that shifting tariffs and regulations could jeopardize their global growth strategy, making international expansion feel like a risk rather than an opportunity.
The report also shows that 94% of ecommerce leaders plan to scale in-country fulfillment over the next five years, with 71% prioritizing Canada as a key market.
“I’m just focusing on Canada now, gaining traction in retail, building the brand here. Once I’ve saturated the local market, I’ll look at setting up U.S. production so I can sell there without shipping across the border,” said Juliana, confirming her priority in the Canadian market.

Other brands are rethinking operations entirely:
Tariff-proofing your brand: 3 moves to consider
For founders still trying to make international ecommerce work in 2025, the advice is sobering—but honest.
“Your COGS are always under assault, and it’ll never end,” wrote Will Nitze, founder and CEO of IQBAR. “General inflation, COVID, labor strikes, tariffs, bad crop yields, freight bottlenecks, storage scarcity… yet if you want true omni-channel scale, you can’t raise prices. Retailers won’t even let you in many cases. The only path out? DEEP supply chain creativity and excellence. If you’re lacking in this area, you’re almost certainly screwed.”
Waiting for policy to stabilize isn’t a strategy. Here’s what brands are doing instead:
1. Rethink What You Sell, Where You Ship, and How You Fulfill.
Tariff resilience is mandatory. Brands that are surviving this moment are:
- Setting up redundant supply chains
- Running margin stress tests on key SKUs
- Pausing certain international ad campaigns
- Localizing fulfillment hubs or 3PLs based on geography
- Splitting SKU catalogs by region
2. Make Duties & Taxes Messaging Obvious.
If you’re able to offer DDP (Delivered Duty Paid) shipping, say it—loudly and everywhere. That peace of mind can mean the difference between a completed checkout and a dropped cart.
Place the messaging:
- In a banner on your homepage
- In product detail pages
- In cart/checkout flows
- In international emails and SMS flows
This has become one of the biggest friction points in buying behavior, especially for cross-border shoppers.
Uncertainty kills conversions.
3. Use Shopify’s New Tools to Control the Experience.
Shopify’s Summer ’25 Edition launched several updates aimed at helping merchants take back some control:
- Tariffguide.ai - Just enter your product description and country of origin to get the correct HS code and duty rate—what used to take hours now takes minutes.
- Duties Collection in Checkout - Now available across all plans. No more covering unexpected costs out of pocket.
- Display Duties to Customers - Build trust by showing total landed cost up front. No surprises = fewer abandoned carts.
- International Shipping Compliance Tools - Stay ahead of shifting rules with built-in code recommendations and alerts.
- Duty Prepaid (DDP) Labeling - If you’re collecting duties at checkout, this is crucial. DDP labeling helps avoid rejected shipments and double charges.
These tools won’t solve the margin squeeze, but they can help preserve clarity, trust, and consistency, especially when shoppers are already on edge.
The age of “plan around it”
For years, tariffs were something brands acknowledged but rarely planned around. That’s no longer an option.
In 2025, trade policy is a frontline business issue—impacting pricing, logistics, conversion, and retention in real time. From freight data to frontline support tickets, brands are seeing the fallout firsthand.
And while enterprise giants may have the political clout to weather—or, perhaps, even anticipate—those shifts, smaller brands are left to do what they always have: adapt on the fly, support each other, and try to grow through uncertainty.
In this environment, even the most passionate founders can’t compete with volatility on their own.