February 21, 2025
by Dakota Morse
VENICE BEACH, CA – As an eight-figure e-commerce seller and owner of ALT Group, a top Amazon agency, and multiple brands, I believe these newly imposed tariffs will disproportionately burden U.S. businesses rather than achieving their intended effect of protecting American manufacturing.
1) Impact On U.S. E-Commerce Sellers And Consumers
The 10% tariff on Chinese goods and the 25% tariff on imports from Canada and Mexico will force U.S. businesses to either absorb higher costs or pass them on to consumers. However, most Amazon sellers don’t source products from Canada or Mexico, meaning this pause has minimal impact on e-commerce businesses. The tariffs so far have been beneficial for companies that import from the U.S. and have a balanced trade relationship with the U.S., something China does not have.
That being said, China operates in a different trade dynamic. Manufacturing partnerships in China have been established for decades, and alternative countries like Vietnam or Thailand lack the infrastructure, scale, and competitive pricing to fully replace China in the short term (Marketplace Pulse). Tariffs on Chinese goods do not significantly impact Chinese factories, but instead place a tax burden on U.S. businesses, which ultimately results in higher costs for American consumers.
2) The Problem With Foreign Sellers On Amazon
A more effective approach to addressing trade imbalances would be to tax foreign sellers who operate on Amazon rather than increasing import costs for U.S. businesses. Currently, over 50% of top Amazon sellers are based in China, while U.S.-based sellers only account for 45% (Consumer Affairs). These Chinese sellers benefit from government subsidies, lower operating costs, and fewer regulatory constraints, allowing them to undercut American businesses. Additionally, many Chinese sellers have been linked to counterfeit products and manipulated reviews, further distorting the marketplace (New York Post).
3) Tariffs On Temu and Shein – A Step In The Right Direction
One of the more effective aspects of this trade policy is closing the de minimis loophole, which previously allowed companies like Temu and Shein to ship up to $800 per day in goods directly to U.S. consumers without paying tariffs. This loophole has severely hurt U.S. retailers by enabling these Chinese companies to bypass import taxes while flooding the market with ultra-low-cost goods. While this move is a step in the right direction, it does not solve the broader problem of Chinese sellers dominating Amazon.
Conclusion: A More Effective Approach To Tariffs
If the real goal is to protect U.S. businesses, tariffs should focus on foreign sellers operating on Amazon rather than penalizing U.S. companies that rely on existing supply chains. A 25% tax on Chinese sellers using Amazon would be far more effective in leveling the playing field without forcing U.S. brands to raise prices. Additionally, stronger regulations are needed to ensure fair competition, including stricter oversight on review manipulation and counterfeit goods.
The 30-day pause on Canada and Mexico might be useful for industries that rely on imports from those countries, but it does not address the larger issue facing U.S. e-commerce businesses—China’s dominance on Amazon. Rather than making it harder for American businesses to compete, policymakers should focus on ensuring that foreign sellers who profit from the U.S. market contribute fairly to the economy.
Dakota Morse is founder of the ALT Group, Venice Beach, Calif.
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