With these three moves, Chinese sellers have successfully dominated the U.S. e-commerce market, while Trump's tariff policies have done nothing to reverse the trend! The aggressive tariffs against China announced by the Trump administration and rapidly escalating will not reverse the fundamental dynamics that have led to Chinese sellers dominating U.S. e-commerce platforms. Despite promises that the tariffs would help U.S. businesses, historical evidence clearly shows that these measures will only make U.S. consumers pay higher prices while failing to shift market share to domestic sellers.
Do you know how high the share of Chinese sellers on Amazon has gotten? Regardless of changes in tariff policies, the share of Chinese sellers on major US e-commerce platforms continues to grow steadily. Currently, more than 50% of Amazon's top sellers are from China, up from less than 40% five years ago. On Walmart, Chinese sellers now account for 28% of all active sellers, up from less than 1% at the beginning of 2021.
It is not that tariffs are ineffective, but that Chinese sellers have structural advantages that tariffs cannot address. Many Chinese sellers are manufacturers themselves, or are closer to a manufacturing base than U.S. firms. They also benefit from Chinese government support through export subsidies and tax rebates. What's more, after years of experience on the platform, they have become increasingly proficient in e-commerce operations.
The biggest problem is that the actual effect of the tariff policy has been the opposite of what was expected.The tariffs imposed on $283 billion in imports during Trump's first administration in 2018 were found by the Journal of Economic Perspectives to have been "almost entirely passed through to domestic prices in the U.S.," meaning it was U.S. consumers and importers, not Chinese exporters, that bore the cost.1 The tariffs have been a major source of revenue for the U.S. economy, but they have also had an impact on the economy. By December 2018, these tariffs were costing Americans an additional $3.2 billion per month in tax costs and an additional $1.4 billion in economic losses.
You'd never guess it, but new analysis from e-commerce software provider Threecolts reveals that small brands and private label businesses are facing a serious cash crisis, with many unable to afford the unexpected cost of tariffs on inventory already in transit. Unprecedented tariff rates are forcing domestic e-commerce businesses to make impossible choices: scrambling for emergency funds at predatory rates, abandoning shipments they can't afford to clear, or attempting to raise prices in an already price-sensitive market.
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# Cross-border E-Commerce # Taiwan Manufacturers # Amazon Sellers # Tariff Policy # E-Commerce Entrepreneurs # Cross-border Exporters # Global E-Commerce Platforms
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