Several Chinese goods are subjected to steep tariffs by the United States. Donald Trump, who was then president, raised tariffs on Chinese imports to at most 145%. These tariffs are also being read again. This has deeply affected Chinese e-commerce companies such as Temu and Shein that depend on low cost products and fast global shippinlow-costding to Chinese government data, Chinese online retailers’ exports to US dropped by 65 percent in the first quarter of 2025. At the same time, exports to Europe rose by 28%. It is evidence that Chinese sellers are reassessing their focus. Instead, they are moving away from the U.S. and turning to, no doubt, the European Union (EU).
Rising Prices Hurt U.S. Shoppers
As tariffs have propelled prices up sharply on Temu and Shein, respectively, the questions have been raised. Import taxes mean that a $12 item can now be upwards of $30. The majority of these costs are passed to customers. For example, a summer dress on Temu rose from $18 to over $44 due to import fees.
High prices may cause many U.S. consumers to stop shopping from these platforms. Low-cost shopping is made unattractive by the extra costs. Much like the UK after Brexit, online shopping from the UK has become unaffordable for many because it’s so much easier to order from the EU as opposed to the UK.
Big Companies Try to Adapt
Still, the tariffs are not stopping some companies. To escape taxes, Shein may relocate production outside of China. Walmart, for its part, has said it may pay the tariffs for some of the products in order to keep prices down. Other retailers are reorienting their business.
Even Amazon was affected. As shown there, the company was considering separating out the tariff costs on its website. However, this idea had a political backlash and was snubbed in no time.
Chinese Firms Look to Expand Elsewhere
It is forcing Chinese e-commerce companies to think tabout heir global strategy. More and more the markets for Europe and Asia are becoming important. However, most of these firms still require the U.S. to turn a profit. Even if they sell globally, the U.S. is still an important customer base.
Other companies are trying to produce their good in the US or some other countries and label them as ‘Made in America.’ This would help avoid tariffs. However, this is expensive and challenging to do. Big barriers are high U.S. labor costs and high costs of setting up a factory. However, many of the parts still arrive from China and would still be hit with tariffs.
IoT Devices Are Also Affected
The Internet of Things (IoT) sector is down as well. Now, more expensive than before are devices like trackers, wearables, and smart home tools in the U.S. Usually, most of these devices are from China. And that higher cost could make it hard for American markets to adopt.
Some companies are adjusting how they price and serve products to address these new costs. In the case of companies, they can shift from one-time sales to something based on subscription. That is so that the cost increase is less obvious to buyers and spread over time.
Software Feels Less Impact, But Still Suffers
The IoT software and services are not directly taxed, yet they are still affected. As prices to buy IoT devices become higher, there is less demand for the software that runs those devices. Some companies are seeking to shift more of their focus to software than other products, since such items aren’t subject to tariffs.
The Future Is Uncertain
It remains to be seen whether or not if Trump stays in office and if tariffs remain in place, Chinese companies will have tough choices to make. In some ways, they may have to change where they make their products or for whom they sell. Some may exit the US market. However, others can find new ways to reduce costs and so on.
For now, the result is clear: higher prices, lower exports, and changing markets. U.S. shoppers and businesses are feeling the impact. Chinese companies are looking elsewhere for growth. The global e-commerce landscape is being reshaped, one tariff at a time.
