Tariffs are back in the spotlight. With the US recently removing its long-standing $800 de minimis duty-free threshold for all countries, retailers worldwide are bracing for higher costs and tighter margins. But the bigger story goes beyond one policy shift – tariffs can hit your business through rising import costs, disrupted exports, and shifting supply chains.
This guide breaks down what tariffs really mean for your business, with practical insights, expert tips, and clear actions you can take to stay ahead.
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Tariff meaning explained:
Definition, what’s changing – and why it matters for retailers
Tariffs are taxes on imported goods. They’re designed to drive up prices to support local industries and generate government revenue – for example, tariffs were once responsible for roughly 95% of US income before 1913. For retailers today, tariffs mean higher costs on imported stock and a supply chain that’s harder to predict.
Understanding the role of HS tariff codes
So, how do governments decide what gets taxed and by how much? That’s where HS tariff codes come in. These are standardised numbers assigned to every type of product – like a global ID for trade. They tell customs authorities what your goods are and what tariffs should apply. Getting them right is crucial, because a mix-up can mean overpaying duties or facing delays at the border.
In the United States, these codes take the form of HTS codes (Harmonized Tariff Schedule codes). HTS codes are based on the global HS system but go into more detail, often adding extra digits that let U.S. customs apply specific duties, quotas, or trade measures. In other words, HS codes provide the universal foundation, while HTS codes are a country-specific extension used to calculate the exact tariff rate when goods enter the U.S.
Tip: Read more about HS tariff codes in our article here.
And what about de minimis?
One policy that long helped eCommerce retailers? The US de minimis exemption. It allowed shipments under $800 to enter duty-free, ideal for those shipping low-cost items at scale.
That changed in May 2025, when the United States removed the exemption for goods from China and Hong Kong. Now, following a new Executive Order issued July 30, 2025, the de minimis threshold is being removed for all countries.
Before and after: how costs change
Before (Pre–August 29, 2025):
A $30 shirt shipped to the US cost $35 ($30 shirt + $5 shipping). If under $800, it qualified for the de minimis exemption with no duties or fees.
After (Post–August 29, 2025):
- Non-postal shipments: That same shirt now incurs duties. With a 20% tariff and $5 processing, it costs $50.95 ($30 shirt + $5 shipping + $10.95 duties + $5 processing).
- Postal shipments (transitional period): For the next 6 months, postal parcels face either ad valorem duty (based on tariff rate) or a fixed duty of $80–$200 per item, depending on origin. That means the shirt could cost anywhere from $115 ($30 + $5 + $80) to $235.
- And after the 6-month transitional window ends, postal shipments will also shift fully to ad valorem tariffs, aligning with non-postal treatment.
What the experts are saying
Insights from leading business experts reveal the complex impact of tariffs on retailers, global trade and economic growth.
Tariffs on the import of foreign goods, including from China, Mexico, and Canada, could over time make manufacturing in the US more economic than importing goods from abroad.
Tariffs can squeeze your margins, but they also reveal who’s adaptable. Watch your costs, know your origins, and shift lanes fast – staying nimble is how you turn a trade barrier into a sales edge.
As with any challenge, small businesses need to be creative about how they respond to tariffs. Looking for alternative suppliers, both domestically and internationally, can offer improved pricing once tariffs are factored in. It makes particular sense to explore suppliers in tariff-free or lower-tariff countries.
Tariffs are a stress test for supply chains. The sharpest retailers will see past the price tags – hunting down tariff-light regions, optimising last-mile delivery, or building resilience locally. They’re not focused on the barrier; but outmanoeuvring the pack.
Tariffs on the import of foreign goods, including from China, Mexico, and Canada, could over time make manufacturing in the US more economic than importing goods from abroad.
Tariffs can squeeze your margins, but they also reveal who’s adaptable. Watch your costs, know your origins, and shift lanes fast – staying nimble is how you turn a trade barrier into a sales edge.
As with any challenge, small businesses need to be creative about how they respond to tariffs. Looking for alternative suppliers, both domestically and internationally, can offer improved pricing once tariffs are factored in. It makes particular sense to explore suppliers in tariff-free or lower-tariff countries.
Tariffs are a stress test for supply chains. The sharpest retailers will see past the price tags – hunting down tariff-light regions, optimising last-mile delivery, or building resilience locally. They’re not focused on the barrier; but outmanoeuvring the pack.
What can businesses do about tariffs?
Here’s how to stay ahead as tariffs shift.
Tariffs aren’t just policy changes – they impact your bottom line. Higher import costs and tougher exports mean it’s time to get smarter about how you manage shipping, suppliers and landed costs.
Here’s what you can do right now.
Get a handle on total costs
Tariffs, duties, and fees can quickly eat into margins if you’re not prepared. Start by making sure you know your true landed cost – tools like Zonos and Global-e can help model these costs up front, so there are no surprises.
From there, look at how you manage duties and taxes operationally. When sending with DHL Express, FedEx, or UPS, Starshipit supports the option to have duties and taxes charged to a third party you’re working with, for example, Zonos. If you already use Zonos, you can simply add your account number into your Starshipit courier settings. This ensures duties and taxes are billed directly through Zonos, streamlining the process and reducing admin for your team.
Be prepared to diversify supply chains
If you’re shipping into the US, it’s worth exploring options beyond tariff-impacted countries like China. Sourcing from countries with lower or no tariffs can help keep costs under control.
Or you can take it a step further: setting up US-based warehousing or fulfilment could reduce import duties altogether and speed up delivery. In some cases, shifting to US-based suppliers may even reduce exposure if the numbers work out.
But when does it actually make sense to invest in US distribution?
A simple way to think about it is by modelling your breakeven point. Shipping directly from overseas means your per-unit cost includes:
- Duties (calculated on the retail price)
- International freight costs
- Local fulfilment and operational costs
By contrast, shipping in bulk to the US and fulfilling domestically looks different. Your cost structure shifts to:
- Duties (calculated on the wholesale cost of goods)
- Bulk freight into the US
- Domestic delivery costs within the US
- Handling costs
- Fixed setup and ongoing fees for warehousing or a 3PL
Once your order volume is high enough, these domestic fulfilment costs can become more competitive than fulfilling everything offshore. The key is running the numbers for your own business, balancing duty savings and faster delivery times against the upfront investment in warehousing or a 3PL.
Stay flexible with your carriers
New rules may mean new suppliers or markets. Use multi-carrier tools like Starshipit to compare shipping costs from your different integrated carriers and easily switch carriers if required.
Make sure your data’s right
Tariff rates depend on the country of origin and the product’s HS tariff code – standardised IDs that tell customs what you’re shipping. Get either wrong, and you could overpay or get fined.
Starshipit can pull COO and HS codes straight from your platform – or you can add them manually to orders by storing within Starshipit using the Product Catalogue – automatically ensuring customs gets the right info before your shipment arrives.
Tip: Read more about HS codes in our blog, and learn more about the Product Catalogue.
Automate customs and duty workflows
Collecting HS codes and country of origin is just the first step. The real efficiency comes when you automate how that data is used. With Starshipit, you can:
- Attach customs documentation automatically - Commercial invoices, declarations, and any required forms are included with every order, reducing the risk of delays at the border.
- Set rules for duty handling - For example, apply DDP (delivery duty paid) for all U.S. orders, or only for shipments above a set value. This helps prevent surprise charges and creates a smoother experience for customers.
- Route shipments for tax efficiency - Automatically allocate orders to the carriers that offer the most favourable duty or tax treatment for each destination.
Automation ensures every shipment leaves with the right documentation and duty setup, saving time for your team and keeping parcels moving.
Stay in the loop
Above all, keep up to date on tariff changes. This is the best way to mitigate any uncertainty and, potentially, seize opportunities when they pop up.
Take control of your shipping today
Tariffs can change quickly, but you can stay ahead. Starshipit provides smart shipping with multi-carrier flexibility, plus tools to manage COO and HS codes effectively.
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Dive deeper into the world of tariffs with our curated collection of insights, featuring expert blogs from Starshipit, partner content, and more:
- From Katana MRP: Guide to Managing Tariffs for SMBs
- Starshipit: Your ultimate guide to HS tariff codes
- Starshipit: Learn about the Product Catalogue feature
Tariffs and Australian retailers: Rising costs, tighter margins, new risks
Tariffs are making life harder for Australian businesses. Exporters to the US and other markets face higher costs, making it tougher to stay competitive as overseas buyers turn to cheaper or local alternatives. For sectors like beef, pharmaceuticals, and minerals, that could mean lost sales or slimmer margins.
What's more, imported components and goods are getting pricier too, especially when easy substitutes aren’t around. This puts further pressure on margins and stretches supply chains.
Many Australian direct-to-consumer (D2C) brands, for instance, manufacture in China and rely on Chinese-based third-party logistics (3PLs) or bonded warehouses to ship straight to US customers. They used to dodge U.S. import duties thanks to the de minimis exemption – an $800 threshold that kept low-value shipments duty-free.
Now, with that loophole closed, they’re losing their edge on low-cost shipping to the U.S. Landed costs are climbing (think higher duties and fees) which they’ll either have to absorb or pass on to customers. What’s more, they’re facing new U.S. Customs and Border Protection (CBP) rules: detailed shipment reporting, holding a carrier bond, and regular duty payments. It’s extra complexity on top of an already tricky situation.
And it doesn’t stop there. Even beyond Australia’s borders, global suppliers slammed by tariffs might hike their prices to offset losses, leaving local businesses footing the bill anyway.
Tariff FAQs
How do tariffs on China affect Australian fashion retailers?
Many Australian eCommerce brands, especially in fashion, source clothing, accessories, and fabrics from China. With US tariffs on Chinese goods hitting 54% (20% baseline + 34% reciprocal) in April 2025, and the de minimis exemption gone, shipping low-cost items like a $30 dress to the US now comes with higher duties.
This squeezes margins for retailers who may have relied on cheap, fast fulfilment to stay competitive in markets like the US.
What does the de minimis closure mean for eCommerce shipping costs?
The US de minimis loophole – which allowed shipments under $800 enter the US duty-free has closed for goods from China. For Australian eCommerce retailers using Chinese manufacturers or 3PLs, this means every parcel, even small ones, now faces tariffs and customs fees. A $50 order that once landed at $55 with shipping could now cost much more with duties, forcing you to either absorb the hit or raise prices for customers.
Can tariffs change how customers shop online?
Yes. Higher tariffs often mean higher prices, especially for imported goods like fashion or electronics. If you pass on costs from China tariffs or US import duties to customers, they might balk at a $60 shirt that used to be $40. Australian retailers might see shifts in demand – for example as customers move to local buying or hesitate on big-ticket items – pushing you to rethink sourcing or promotions to keep carts full.
Why did China put tariffs on Australian wine?
In 2020, China introduced steep tariffs on Australian wine – up to 218% – citing anti-dumping claims. In reality, it was widely seen as part of broader trade tensions between the two nations. The result? Australian wine exports to China collapsed, costing the industry hundreds of millions.
What’s the status of Chinese wine tariffs on Australia?
After several years and a formal World Trade Organisation dispute, China has begun reviewing these wine tariffs. A full reversal could open doors again for Australian exporters, but for now, wine producers are diversifying into other markets and rethinking pricing strategies.
David Renwick
David is Starshipit's Product Marketing Lead. When he's not whipping up a fresh new product update or chatting to customers for a new case study, you'll typically find him scoping out coffee spots and talking about what's on at the movies. Connect with him on LinkedIn.
