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  • 80/20 of Ecom: Massive Tariff Fallout—Prices Surge, Jobs Cut, Ads Slashed [5/2/25]

80/20 of Ecom: Massive Tariff Fallout—Prices Surge, Jobs Cut, Ads Slashed [5/2/25]

Author

Gary Huang
May 02, 2025

Hey guys,

We’re heading into May and things are getting even more unpredictable.

China says they’re open to talks—Trump says tariffs will stay. Meanwhile, Amazon sellers are hiking prices, skipping Prime Day promos, and scrambling for suppliers in Vietnam and Mexico.

If you’re still sitting on the sidelines waiting for clarity, this is your signal to move.

Plus: a hands-on AI automation masterclass you don’t want to miss, and SmartScout’s data on 930+ price hikes post-tariff.

Let’s break it all down in this week’s 80/20 of Ecom 👇

As of today, Beijing is evaluating an offer from Washington, and they’re looking to have talks to discuss how they can solve President Trump’s crippling tariffs, according to Chinese state media on Friday.

In other words, they said that Beijing’s door was open to discussions. This finally is a thaw in the stalemate between the U.S. and China. If we finally see tariffs start to come down, the whole community is watching with anticipation to see what happens next.

According to Peter Sand, Xeneta Chief Analyst, falling demand out of China has coincided with shippers rushing imports out of Vietnam. As a result of the 90-day pause on reciprocal tariffs, we’re seeing the axis of global trade shifting.

At the same time, most shippers are hoping that tariffs will be scrapped or at least mitigated. “No one can make long-lasting business calls on the back of fingers crossed,” he added.

But there is an expectation of higher tariffs to be around “for as long as the Trump administration reigns.”

Takeaway for sellers:
Keep your eye on the news and how Beijing and Washington come through this tariff debacle. At the same time, we do not expect tariffs to come down to zero. It probably will be somewhere between 145% at the peak and 25% since the Trump administration won.

In any case, smart sellers know that they need to pivot and adapt their businesses to these uncertain times.

“If you were selling something for $40 and making a $7 or $8 profit at the end of the day, with these tariffs, those days are gone,” Dama said. “You can’t do that anymore. It’s unsustainable.”

We’re seeing Amazon sellers raising prices on a myriad of top sellers as they’re facing the higher import costs associated with the tariffs.

SmartScout has tracked 930 products and seen an average price increase of 29% in a number of categories, including jewelry, clothing, toys and electronics, household items, and office supplies.

Aaron Cordovez, founder of Zulay Kitchen—the number one bestseller of garlic presses, the most competitive niche on Amazon—says that he’s scrambling to look for suppliers in Vietnam, Mexico, and India.

At the same time, he’s also been forced to lay off 19% of his workforce and slash his online advertising spend by 85%.

Many sellers are looking to hold on to their inventory as long as they can, including 8-figure seller Brandon Furman, as featured on the 7 Figure Seller Summit last week.

Sellers now are looking to increase their price, not to drop their prices, so many of them are foregoing Prime Day promotions. This is the first time we’ve ever seen this.

In over a decade of Amazon selling, are these a sign of future times to come—or is this simply temporary?

The takeaway for sellers:

Everything boils down to how the tariffs pan out. Make sure you follow the 80/20 of Ecom newsletter as we’ll cover any breaking coverage as the tariff situation continues.

My friend Ritu Java is back with another can’t-miss live AI automation masterclass, and if you’ve been sitting on ideas you know could save you time (but haven’t built yet)… this is your chance.

Whether you're new to Make.com or just overwhelmed by the AI automation rabbit hole, this hands-on workshop will get you from “I should” to “I shipped.”

🧠 What You’ll Learn:

  • 🔧 Beginner-friendly Make.com walkthrough – start building even if you’ve never touched a no-code tool

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  • 🎯 How to prioritize what to automate first for max ROI

📍 Details:

🗓️ Live on Wednesday, June 5 at 1 PM PST
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If you’ve been stuck in “I understand the theory but haven’t built anything” mode, this is the workshop that changes that. Ritu’s sessions always sell out for a reason: they get results.

Go from curious to confident in 90 minutes — and start automating like a pro.

As the U.S.–China trade war heats up, so do the consequences for importers. In 2024 alone, the U.S. imported over $400 billion in goods from China—making China a critical, yet vulnerable, link in the global supply chain.

Now, amid escalating tariffs (up to 145%), eCommerce businesses are confronting a new sourcing reality. Whether you sell electronics, furniture, or toys, the ripple effects of this trade war are already showing up in product pricing, margins, and availability.

📊 A new analysis from Supply Chain Dive breaks down which U.S. product categories are most dependent on Chinese suppliers—and which may soon see cost volatility. The article reveals that some categories, like baby carriages and umbrellas, rely on China for 96% of imports, leaving sellers exposed to major disruptions.

👉 Explore the full report to see how your catalog may be affected.

🧭 What Sellers Need to Know:

  • China accounts for 11% of all U.S. trade
    Key categories: electronics, machinery, toys, sports equipment, furniture

  • Massive tariffs already in place
    Imports from China are facing up to 145% tariffs, triggering product repricing and margin erosion

  • Uncertainty reigns
    The WTO warns that tariff volatility is dampening trade flows, slowing exports, and disrupting planning across industries

  • U.S. businesses are reacting
    Some sellers are pausing shipments, raising prices, or diversifying supply chains to hedge against prolonged trade instability

📦 Takeaway for Sellers:

  • Audit your sourcing strategy: Know which of your SKUs are dependent on Chinese suppliers, especially in high-risk categories like toys, home goods, and electronics.

  • Prepare contingency plans: If tariffs persist, consider diversifying to alternative manufacturing regions or negotiating with suppliers for margin protection.

  • Monitor product-specific impacts: Use HTS codes or supplier reports to evaluate which items could be hit hardest—and adjust pricing or inventory levels accordingly.

  • Optimize listings with cost volatility in mind: If higher prices are inevitable, enhance perceived value with better positioning, bundling, or upgraded features

📌 In Case You Missed It

📩 Want to be Featured in the 80/20 of Ecom Newsletter?

I work with brands and sellers to help them grow, scale, and succeed. Here’s how we can work together:

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📩 Contact me: gary [at] 8020sourcing.com

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-Gary