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Trump-Xi call signals tariff talks, Ralph Lauren's 8-year playbook, ocean rates spike 72% | 6/6/25

Trump and Xi set trade talks, fashion giant's supply chain secrets, and shipping costs explode

Author

Gary Huang
June 06, 2025

Summer is here and things are heating up as we turn the calendar to June. We're halfway through the year and the developments this week could reshape your business for the rest of 2025.

President Trump got on the phone with Chinese leader Xi Jinping this week, and Trump said he had a good talk with Xi. They haven't struck a deal yet, but it looks like they're moving in the right direction because Xi invited Trump and the First Lady to China for a meeting.

There's been a lot of negativity since the 90-day tariff reduction period, so this could be a move in the right direction. Trade officials from the U.S. and China will be meeting soon at a to-be-determined location.

The call came amid the ongoing trade war between Washington and Beijing, with Amazon sellers getting caught in the middle.

Takeaway: Stay tuned to see what happens next. Will tariffs go away? Will they spike back up? Or will they land somewhere in the middle between 30% and the previous 145%? This could significantly impact your sourcing costs and business planning for the rest of 2025.

Ralph Lauren, the iconic fashion brand, is leading the way in tackling tariffs with a super agile supply chain strategy. But here's the thing—they didn't just flip this switch overnight.

The fashion brand has manufacturing across 5 continents to mitigate the impact of tariffs. They've spent the past 8+ years diversifying away from China. Right now, China only represents a single-digit percentage of production for Ralph Lauren.

For pricing, they're using flexibility by reducing discounts rather than just raising prices to cover increasing costs due to tariffs and other factors.

CFO Justin Picicco says they work closely with suppliers to shift volumes based on quality and cost. They're not just going for the cheapest price—they're going for quality and relationships, then flexing their volume.

The key takeaway: No single country accounts for more than 30% of production. That's their diversification benchmark. And this level of supply chain agility took nearly a decade to build.

Takeaway: You don't need to wait 8 years to start protecting your margins. In the 14-day Tariff Profitability Challenge, you'll learn tactics like these that 7- and 8-figure sellers are using right now so you can thrive during tariff unpredictability instead of just surviving it. Check it out here if you haven't already.

We predicted this and it's coming to fruition. Ocean container rates are starting to soar. Container rates experienced a significant increase this week (June 5th, 2025).

Specific rate jumps:

Asia to West Coast: Spiked 72% to $4,765 per container
Asia to East Coast: Spiked 44% to $5,721 per container
Yantian to Los Angeles: Rose from $3,610 to $6,000 per FEU
Ningbo to LA: Jumped from $3,181 to $5,431 per FEU

Why? Multiple factors: Strong demand after tariffs came down to 30% in the 90-day period—everyone's in a rush. Add tight capacity, port congestion, vessel diversions, and ongoing Red Sea routing issues.

Takeaway: This will impact costs for importers significantly. Make sure you get competitive quotes so you don't lose out on your margins. Factor these increased rates into your COGS and pricing, and consider booking shipments further in advance.

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Get Ready for What's Coming

Summer is coming on strong. Hope you're ready for Prime Day—watch out for the prices on Prime Day promotions and deals. Amazon is continuously raising the prices. Keep your eye on the bottom line.

Have a great week ahead!

Gary