80/20 of Ecom: Breaking: Tariffs Slashed to 30%: Your 90-Day Profit Opportunity 5/13/25

Hey there,

Gary here with a quick SPECIAL EDITION of the 80/20 Sourcing newsletter because something major just happened that affects almost every Amazon seller importing from China.

Big news from the weekend: The US and China have agreed to a temporary pause in the escalating tariff war that's been hammering importers since early April.

The Short Version: What Just Happened

U.S. and Chinese officials have reached an agreement to roll back most recent tariffs and implement a 90-day truce in their trade war to facilitate further negotiations. If you've been struggling with profitability since "Liberation Day" on April 2, you just got a 90-day reprieve.

Here's what you need to know:

• The US will lower tariffs on Chinese goods from 145% to 30%

• China will reduce its retaliatory tariffs on US goods from 125% to 10%

• Both countries will implement the pause and agreed-upon actions by May 14

• President Trump said these are temporary suspensions (not cancellations) for 90 days

What This Means For Your Amazon Business

This is a significant but temporary opportunity to:

1. Restock inventory that was prohibitively expensive under the 145% tariff rate

2. Adjust pricing strategies for the next 90 days

3. Plan ahead for what happens after the 90-day window

Freight rates are projected to rise sharply in the coming weeks as importers rush to capitalize on this window of opportunity. This pattern echoes transportation capacity challenges observed in late 2021 and early 2022, as carriers seek to maximize pricing power during an anticipated surge in shipments.

Supply Chain Diversification: Your 90-Day Action Plan

If this tariff roller coaster has taught us anything, it's that relying solely on Chinese manufacturing is increasingly risky. This 90-day window isn't just for restocking—it's your chance to build a more resilient supply chain.

Here's what you should be doing right now:

1. Audit your product catalog - Categorize your products by:

   • High-margin products that can absorb tariff increases

   • Products with thin margins vulnerable to tariff fluctuations

   • Best-selling products that need supply chain security

2. Explore these sourcing alternatives:

   • Vietnam - Already established as a manufacturing hub with strong growth

   • India - Rapidly expanding manufacturing capabilities and favorable trade relations

   • Mexico - Proximity advantages and USMCA benefits for North American sellers (By the way we are having a live webinar this Thurs on Sourcing from Mexico (RSVP here) 

   • Thailand - Strong in electronics, automotive, and consumer goods

   • Malaysia - Developing strength in electronics and consumer products

3. Consider a hybrid approach - The most successful Amazon sellers I know are using:

   • Chinese suppliers for components and raw materials (lower tariff impact)

   • Assembly and finishing in secondary countries

   • Multiple suppliers across different countries for bestsellers

4. Evaluate reshoring options - For high-margin products, domestic manufacturing might now be competitive when factoring in tariff risk, shipping costs, and lead times
   

Remember what Treasury Secretary Bessent said this weekend: "What we do want is a decoupling for strategic necessities, which we were unable to obtain during Covid." The US government strategy is clearly pushing for reduced dependence on Chinese manufacturing.

Key Takeaways For Sellers

1. Act quickly but strategically: Companies should ship as early as possible to minimize delays and reduce the risk of cargo being bumped during this period of heightened activity. Don't wait until July to place orders.
   

2. Beware of rising freight costs: Transportation rates are expected to surge as importers rush to leverage the temporary tariff reductions, potentially creating capacity constraints across the supply chain. Larger, more consistent importers will get preferential treatment from carriers when capacity tightens.
   

3. Prepare for volatility after 90 days: President Trump told reporters that while the tariffs might not return to 145% after the 90-day period, they could "go up substantially higher" than the current 30% rate if no further progress is made. Have contingency plans ready.
   

4. Don't assume this means the trade war is over: Chinese business leaders are treating this as a temporary reprieve. Elaine Li, head of Greater China at Atlas Ways, said many Chinese firms would treat the reprieve as temporary. "For businesses, the best they can do is build a moat around their company before the next round of tariffs arrives," she said.
   

5. Watch the economic indicators: Markets responded positively - the Dow closed higher by 1,161 points (2.81%), the S&P 500 gained 3.26%, and the tech-heavy Nasdaq surged 4.35%. As a result, investors showed greater appetite for riskier assets. The US dollar rose 1.4% against a basket of currencies. US oil surged 1.52% to $61.95 a barrel, while gold (typically a safe-haven asset) tumbled 2.7%.
   

My Take

This gives Amazon sellers a crucial 90-day window to optimize inventory and pricing strategies. If you've been holding off on restocking products that became unprofitable under the 145% tariff regime, now's your chance to act.

But don't be complacent. This is a temporary measure designed to facilitate further negotiations. The smart play is to use these 90 days to:

1. Restock essential inventory

2. Explore supply chain diversification (outside China)

3. Build tariff increases into your long-term pricing strategy

4. Monitor freight rates closely and book early

5. Prepare contingency plans for August when rates could increase again

I'll be sharing more detailed strategies for navigating this situation in our regular newsletter and upcoming workshops.

What's Your Next Move?

I'd love to hear from you: How will you be using this 90-day tariff reduction window? Are you planning to:

• Rush orders to restock inventory?

• Start conversations with suppliers outside China?

• Take a wait-and-see approach?

• Something else entirely?

Hit reply and let me know your plans. I'll share the most interesting strategies (anonymously) in our next newsletter. Your insights could help other sellers in our community navigate this challenging landscape.

As always, stay agile and keep optimizing,

Gary

P.S. Keep an eye on freight rates – they're likely to spike as everyone rushes to capitalize on this temporary window. If you need to ship from China, book early!

P.P.S. If you're joining us for the upcoming Tariff Profitability Challenge, this development makes the timing perfect. We'll be directly addressing how to handle this 90-day window and what to do when it expires.