How Trump's China Trade War may Affect your E-commerce Business

Trade is one of the most debated topics in the news right now. President Trump has talked about trade tariffs upwards of 45%. The goal is to create equal trading grounds with China and bring manufacturing jobs back to the United States. However, perhaps one unintentionally affected group is e-commerce businesses. Many rely on China as a cheap and efficient resource for supplying their online stores.

How Trump's China Trade War may Affect your E-commerce Business

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What affect will this have on e-commerce businesses? And how can your e-commerce business react to changes? At its worst, trade tariffs will really hurt. Paying 25% more for a product is a significant difference, and both you and your customers feel it. Raising your prices may be the most obvious option. Yet so much of e-commerce shopping decisions are based on finding the best deal.

Remember your advantage! Customers shop online because of the convenience. To keep competitive, think of ways you can simplify the shopping experience of your store. Chances are you’ll still be able to drop your prices lower than a physical store front could. Customers will choose online shopping first, so reward their decision. Maybe that’s faster shipping. It could merit a better brand connection. Think of some way to not only offer a competitive price but add a little extra value to the sale.

Another option is finding a trade source other than China. While you may find a cheaper import tax, it may not be worth it given other expenses. China works like a well-oiled machine. Many of their manufacturing and trade systems are optimized for efficiency. Consider whether or not you’ll actually save money using another company or if China’s process is still worth your time with the extra taxes. Whatever you choose, you can stay ahead with tax tools to forecast and report the latest import information.

Don’t forget that China isn’t the only recipient of Trump’s attention. In recent weeks, he’s called out Amazon and Jeff Bezos on their business model and taxes. e-commerce is a billion dollar industry and has been growing steadily the last number of years, in large part thanks to Amazon. More retailers in the market results in the creation of more jobs. It’s a sticky place to pick a fight.

The good news in all this e-commerce uncertainty is that the industry is still very stable. Prices may vary and taxes may require some restructuring, but all in all, e-commerce isn’t going anywhere. It’s also good to note that China is already fighting back. Strong competition will keep the industry more stable in the long run. Finally, you can bet that Amazon will fight legislation as well.