Tariffs can sneak up on your business – through rising import costs, disrupted exports or shifting supply chains. And depending on where and how you ship, the impact isn’t always obvious.
Learn what tariffs really mean for your business, get practical insights, tips from experts and clear actions you can take to stay ahead.
Tariff updates (As of April 10, 2025)
- Trump drops reciprocal tariffs to 10%, pauses higher tariffs for 90 days, hikes China's to 125%
- De minimis loophole closure May 2 adds duties for Australian retailers shipping Chinese goods to US, raising costs.
- US 25% steel/aluminium tariffs (March 12) apply to Australian exports – no exemptions granted despite lobbying.
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, where they’re from, and what tariffs should apply. Getting them right is crucial, because a mix-up can mean overpaying duties or facing delays at the border.
Tip: Read more about HS tariff codes in our article here.
And what about de minimis?
One policy that’s helped eCommerce retailers? The US de minimis exemption. It’s let shipments under $800 enter duty-free, ideal for those shipping low-cost items at scale.
This loophole helped surge Chinese businesses like Temu and Shein in the US, but that’s set to change. When the exemption ends, those parcels will face tariffs, pushing up costs for businesses built on lean, fast fulfilment.
Here’s an example overview of the before and after of this change:
- Before (Pre-May 2, 2025): A $30 shirt from China shipped to the US cost $35 ($30 shirt + $5 shipping), qualifying for the $800 de minimis exemption with no duties or fees.
- After (Post-May 2, 2025): With the de minimis rule ended for China and a 20% tariff applied, the same shirt now costs $50.95 ($30 shirt + $5 shipping + $10.95 duties + $5 processing) or $60 via postal entry ($25 flat duty), rising to $85 after June 1, 2025.
As of now, the de minimis exemption has only been removed for goods from China and Hong Kong (effective May 2 this year), meaning all shipments from those origins, regardless of value, are subject to tariffs and formal customs entry. For other countries, like Australia and the UK, the situation is trending toward broader restrictions.
Regardless, it’s time to plan ahead. Tariff shifts can hit margins hard, but knowing what’s coming means you can adjust and keep things moving.
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. But with that loophole closing on May 2, 2025, those same retailers are in for a shake-up.
Now, 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) as of April 2025, and the de minimis exemption gone since May 2, 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 – will close for goods from China on May 2, 2025. 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 $70+ 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.
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 sneak up and eat into margins. Tools like Global-e can help you calculate true landed costs – so there are no surprises.
Be prepared to diversify supply chains
If you’re shipping into the US, explore options beyond tariff-impacted countries like China. Sourcing from countries with lower or no tariffs could keep costs down.
Where feasible, direct fulfilment from your origin country might make sense too, cutting out middlemen and tariffed regions. Or, take it a step further: setting up US-based warehousing or fulfilment could mean avoiding import duties altogether and speeding up delivery. Even shifting to US-based suppliers might reduce exposure if the numbers work.
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 add them manually to orders via 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.
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
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.
