As soon as Trump's tariff policy was implemented recently, the waters of global trade were completely muddied, and tensions were rising. We, the cross-border e-commerce companies, were directly caught in the center of this storm. Today, let's talk about the tricks here and see how we, the sellers, should deal with it.
With the introduction of policies, commodity prices are rising
On the Amazon website in the United States, since April 9, the prices of nearly 1,000 products have risen sharply, including clothing, household goods, electronic products, toys, etc., with an average price increase of nearly 30%. Not only Amazon, but also cross-border e-commerce platforms such as Temu and Xiyin have issued announcements, saying that they will adjust prices from April 25, because of changes in global trade rules and tariffs, which have increased operating costs. American netizens are complaining on social media that when they wake up, the things in their shopping carts have become more expensive.
Analysis of the underlying causes
America's political and economic calculations
Trump's tariff policy is mainly to protect American domestic industries and increase domestic employment. He thinks that the previous trade policy made the United States suffer, and a large number of foreign goods came in and took away the jobs of American companies. From a political perspective, this can please some domestic interest groups and gain political capital for himself. From an economic perspective, it is to make foreign goods more expensive by increasing tariffs, so that Americans will buy more domestic products. However, this move completely ignores the fact that global trade is interdependent and that a single move can affect the entire body.
The fragility of global supply chains
The global supply chain is now closely connected. If there is a problem in one link, the entire chain will be affected. For the production of many goods, the raw materials may come from different countries, and the processing is done in other places, and finally sold all over the world. Once the tariff is raised, the cost of purchasing raw materials and transportation costs will also increase. For example, to produce a piece of clothing, cotton may be imported from country A, processed in country B, and sold to the United States. Once the tariff is added, the cost of each link from cotton procurement to transportation to processing will increase, which will eventually lead to an increase in the price of clothing.
Significant impact on all parties
Pressure mounts on US consumers
The American people are the most directly affected. As commodity prices rise, the same amount of money can buy fewer things, and the cost of living increases. Daily necessities that were easy to buy before now cost more money, and the pressure on the wallet has increased dramatically. For example, some low-income families, who originally relied on buying cheap cross-border goods to make a living, have now had a harder time.
Cross-border e-commerce platforms face challenges
For cross-border e-commerce platforms such as Amazon, Temu, and Xiyin, operating costs have risen and profit margins have been squeezed. In order to maintain operations, they can only choose to raise prices for goods. However, price increases may lead to consumer loss, and the platforms are in a dilemma. Moreover, with so many sellers on the platform, coordinating price adjustments is also a big project.
Domestic cross-border sellers are in a difficult situation
Domestic cross-border sellers are under even greater pressure. Costs are rising, and if they don’t raise prices, they will lose profits; if they raise prices, they are worried about affecting sales. Some small sellers, who already have thin profits, may face losses or even bankruptcy. In addition, they have to recalculate costs and adjust pricing strategies, which disrupts the entire operation rhythm.
Will price increases by domestic cross-border sellers affect sales?
This is the issue that everyone is most concerned about. In the short term, price increases will definitely make some price-sensitive consumers hesitate or even give up buying, and sales may decline. But it is not absolute. If your product has unique value, such as excellent quality and novel design, consumers may still pay for it. For some sellers with high brand awareness, consumers have a relatively higher tolerance for prices. In addition, if the entire industry raises prices due to tariffs, then your price increase may not have such a big impact on sales, because consumers do not have many low-priced options.
In the long run, how should cross-border sellers respond?
Optimize supply chain and reduce costs
Finding a more cost-effective raw material supplier does not necessarily limit you to the original place of cooperation. For example, if you used to import raw materials from the United States, you can now look at Southeast Asia, Africa and other regions to see if there are suitable ones. You can also negotiate a long-term cooperation agreement with the supplier to get a more favorable price. In terms of transportation, compare different logistics channels and choose low-cost and high-efficiency ones. If conditions permit, you can also consider shipping with other sellers to reduce unit transportation costs.
Product innovation and differentiation
Try to make distinctive products so that consumers feel that it is worth spending more money. You can innovate in product functions, such as adding some new functions for electronic products; or spend time on the appearance design to make the product more attractive. You can also provide personalized customization services to meet the needs of different consumers. Through product differentiation, you can improve your competitiveness and reduce your dependence on price.
Expanding diversified markets
You can't put all your eggs in the US basket. In addition to the US, Europe, Asia, South America and other regions have great market potential. Study the needs and preferences of consumers in different regions and adjust products and marketing strategies accordingly. For example, European consumers pay attention to environmental protection and quality, so you need to work hard on the use of environmentally friendly materials and quality control of your products. By expanding the market, you can reduce your dependence on a single market and reduce the risks brought by tariff policies.
In short, although Trump’s tariff policy has brought huge challenges to cross-border e-commerce, as long as we sellers actively respond, optimize the supply chain, innovate products, and expand the market, we can still find opportunities for survival and development in this storm. Come on, everyone!
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400-076-6558智领未来，外贸超级营销员
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