The new tariffs, aimed explicitly at goods from China, are shaking down the online shopping world and, in many cases, interfering with small and mid-sized businesses. It isn’t just that imports cost more; business owners must change how they source products, set prices, and handle shipping to stay competitive and manage their bottom line in the current global trade scene.
New Trade Walls
The latest tariff hikes on Chinese imports are causing major global trade drama. These moves are meant to boost local production and fix trade imbalances, but they’ve hit online businesses hard.
For years, many large and small companies have depended on cheap overseas components and contract manufacturing, particularly in China. Now, those same companies are facing severe financial and operational issues. The easy access to cheap manufacturing that has helped many online stores grow has been cut off, forcing companies to rethink–and, in some cases, rebuild–their supply chains.
An All-New Profit Squeeze
For many online businesses that run on selling their goods with small profit margins, even tiny increases in parts’ prices can be a significant headache. For instance, Rinseroo, founded by Lisa Lane and recently featured on Shark Tank (Jan 2025), faces severe profit margin erosion due to potential 145% tariffs, which are threatening her business viability, and US manufacturing alternatives are cost-prohibitive. For Lisa, producing her product here in the States is 12 times more expensive.
Additionally, having to pay tariffs upfront at customs can damage cash flow, tying up money that could be used for buying more stock, marketing, or paying employees. This extra financial pressure can be especially tough on smaller businesses that don’t have many investors or savings.
Dealing With Uncertainty
Because component parts are costing more and experiencing delays, online brands are forced to make tough choices. Many are pausing business growth, holding off on new products, and/or cutting back on ads while dealing with the tariffs’ immediate impact.
They have even begun looking for other outlets to purchase their goods, particularly in Southeast Asia. But those areas often have problems, such as weak infrastructure, unreliable or poor-quality components, local scuffles, and sometimes widespread wars. And the hassle of starting new relationships and supply lines can be daunting for overworked business owners.
Manufacturing in a company’s own country is an option, but for many small businesses, it’s simply too expensive and difficult to scale. This leaves many business owners in a tough spot, caught between rising import costs and no good alternative ways to make their products.
Shipping and Stockpile Issues
Tariffs affect more than what comes into port. They also disturb exports. Uncertainty and social sentiment can impact what companies send overseas, which means less money for online businesses that sell worldwide.
Additionally, ports are taking longer to inspect imported goods, causing long delays in getting stock, unexpected storage fees, and other issues. In some extreme cases, the rising costs of imported products force sellers to abandon their shipments altogether, leading to substantial financial losses and disturbances in the supply chain.
Making Hard Choices
Beyond the money and operations headaches, the new tariffs tremendously stress online business owners. Facing smaller profits, disrupted supply chains, and an uncertain future, many have to make tough calls like raising prices, which can make customers unhappy or, even worse, think about company layoffs.
Mark Crames, CEO of Demeter Fragrances, a 25-year-old family-run company facing significant challenges due to tariffs, sums up how many owners feel by saying, “I cannot believe that I am having these conversations with people I’ve been doing business with for 15, 20 years… we’re frozen. And we don’t know what comes next.”
The New Normal?
While many small businesses hope the tariffs won’t last, the reality is that business owners will have to adapt quickly to a completely changed playing field. More and more business owners are asking for support and awareness of how tariffs are hitting small businesses just as hard as large corporations.
However, there might be some silver linings. Higher tariffs mean fewer fake products coming from overseas and more customers channeling money into local businesses. But good things will only happen if those businesses find new ways to source products, set prices, and learn to run their operations efficiently in this new era of trade barriers.
Challenges Ahead
The ability of online business owners to bounce back from hard times and come up with creative solutions will be tested as they try to survive and thrive in the changing global marketplace. For some, this may be a boon. For others, it may have reached the end of the line.
