80%'s cross-border e-commerce entrepreneurs made the wrong first step! They thought Trump's tariff policies would save US e-commerce, but the opposite has happened. The Trump administration's rapid escalation of aggressive tariffs against China will not reverse the underlying market dynamics that have led to Chinese sellers dominating the U.S. e-commerce platform. Historical data clearly shows that these tariffs only make U.S. consumers pay higher prices without shifting market share to domestic sellers.
The biggest problem is that tariffs do not address the structural advantages of Chinese sellers. 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.
It's a lot more serious than you might think! Despite changes in tariff policies, the share of Chinese sellers on major U.S. e-commerce platforms continues to grow steadily. Currently, more than 50% of the top sellers on Amazon are from China, up from less than 40% five years ago. On Walmart, Chinese sellers now account for 28% of all active sellers, an alarming increase from less than 1% at the beginning of 2021.
Do you know what the consequences of 2018's tariff policies have been? A study by the Journal of Economic Perspectives found that these tariffs were "passed through almost entirely to U.S. domestic prices," meaning that it was U.S. consumers and importers, not Chinese exporters, who bore the cost. 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.
The effect has been dramatic: rather than bringing manufacturing back to the United States, the tariffs have simply redirected trade flows. The study found that about $165 billion in trade is redirected each year, with companies creating complex avoidance mechanisms, including third-country shipments, reorganizing business entities, and reclassifying products to avoid the tariffs.
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# Cross-border E-commerce # Taiwan Sellers # Amazon Global Store # Tariff Policy # E-commerce Entrepreneurs # Global Sales # International Brands
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