Under the unprecedented tariff shock, Chinese cross-border sellers are struggling to survive at the limit.

To raise prices or not?

Text by | Zhang Ziyi

Edited by | Yuan Silai

Source | Hardcore Kr (ID: south_36kr)

Cover image source | Pexels

This will be a week that goes down in the history of world trade.

On April 8th, Eastern Time in the United States, the US further increased the so - called “reciprocal tariffs” of 34% previously announced on Chinese products exported to the US by 50% to 84%. Coupled with the previous 20% tariff, the US tariffs on Chinese products will reach 104%. On April 11th, this figure reached 145%.

In addition to these tariffs, on April 8th, 2025, local time in the US, the US announced that starting from May 2nd, 2025, parcels worth less than $800 sent from the Chinese mainland and Hong Kong to the US will no longer enjoy tax - exemption treatment and will need to pay a tariff of 90% of their value or $75 per parcel (increasing to $150 per parcel after June 1st, 2025). The T86 customs clearance policy that boosted the rapid development of Shein and Temu may no longer exist.

The Chinese cross - border e - commerce industry has entered its most turbulent period.

After the tariff increase exceeded 100%, sellers have become numb to the numbers. Waiting and seeing, unease, and anxiety have become the main emotions of cross - border e - commerce sellers recently. No one can predict the direction of world trade, nor can anyone anticipate what tomorrow's news will be.

But as businessmen, they also remain quite optimistic.

This group of cross - border sellers deeply believe in China's manufacturing capabilities. In this country with the most comprehensive global supply chain, whether they are brand - type sellers or small and medium - sized sellers, they will repeatedly tell us: The world cannot do without Made in China. Now, the only things troubling them are whether to raise prices, the necessity of price increases, and the ability to optimize the supply chain.

The game between countries cannot stop the flow of business. “No one will give up the US market” is also a key phrase. No seller is willing to give up the world's largest consumer electronics market, even if it means paying a higher price. Amid the grand narrative, the instincts of businessmen will still prevail over differences in stance again and again.

We interviewed three cross - border sellers. They have different scales, business models, and backgrounds. What they have in common is that they have been in the foreign trade and cross - border industries for many years and have witnessed the industry's turmoil and vitality. They have both consensus and differences, which depend on their different roles, so they can also provide different perspectives and possibilities for more people.

In the stormy waves, it takes courage to stand at the forefront. These sellers embody the perseverance and flexibility of countless small and medium - sized entrepreneurs. The desire to survive will help them overcome difficulties time and time again.

Jeff, a brand - type cross - border seller of 3C products:

Tariffs need to be discussed from several aspects. From the perspective of imports, we need to check the raw materials imported from the US, such as electronic devices and plastic particles. Some of them may not be of US origin, and even if they are from US companies, their production locations may not be in the US. So, from the perspective of the supply chain, we need to see if there are any US - related raw materials. If so, either raise prices or find alternative country solutions.

In terms of exports, in the next one or two months, the “temperature” of tariffs may not be that high yet, and the situation is relatively stable. Basically, the inventory shipped from China usually lasts for at least a month. However, after this batch of inventory is used up, I estimate that on the one hand, the ports may be congested because customs officials don't know what to do; on the other hand, our costs will increase, and we may really have to raise prices. After the price increase, the demand of American consumers may decline, especially for non - essential products.

We are also conducting internal checks on the supply chain, but there is no clear solution yet. For us, first of all, we need to check the Apple - related components, and also pay attention to some chips produced in the US by European companies.

The localization rate of our products is quite high. Except for the part that requires Apple MFI certification, we have avoided using US - related components as early as possible. However, there are still some uncertain situations. For example, it is not clear whether there will be problems if a US company produces in Taiwan, China, and then ships the products directly from Taiwan to the Chinese mainland. Currently, no one can give us an answer.

People in the industry are quite anxious. Last night at one o'clock in the morning, people in various groups were still talking about tariffs. Currently, the situation is just at the stage of anxiety. In one to two months, the market will become even more troublesome.

I think tariffs will have the greatest impact on the following types of companies: First, companies without core competitiveness that rely on low - price sales and small - parcel shipments; second, companies with replaceable supply chains, such as those with technology supply chains in Southeast Asia and Latin America; third, companies with tight cash flows. Now, the uncertainty in cross - border e - commerce has increased, and it is unclear when contracts can be signed and payments can be received. After the remittance, the situation of the RMB exchange rate may cause the gross profit margin to disappear if not handled properly, and then the business cannot continue; fourth, companies with a relatively high proportion of the US market, which may account for 60% to 80% of the company's revenue. They are in an awkward position now.

We will no longer focus on the US market. Previously, the US market accounted for more than 50% of our business, and now we have controlled it to less than 30%. We made adjustments in the past two years, partly for growth and partly considering the risks of the trade war. Fortunately, we made these adjustments, otherwise, we would be in big trouble now.

To be honest, it doesn't make much sense to speed up restocking now. If the tariffs take effect immediately, restocking won't help.

If the tariffs increase later, I will definitely raise prices. Why not? Originally, the minimum increase was said to be 20% to 50%, but now it has exceeded 100%. After the increase exceeds 100%, it doesn't matter whether the tariffs increase or not because there is no competitiveness anyway. The 3C industry is relatively better because there are not many alternative industrial chains in the world. For some industries, such as clothing and footwear, there are alternative industries, and you won't be able to sell products if you raise prices.

To be honest, we are also waiting and seeing about price increases. If our peers don't engage in internal strife and raise prices together, I have no problem. Chinese manufacturers should raise prices collectively. It is unreasonable for some Chinese suppliers to bear the tariff costs under pressure from US retailers. Many Chinese cross - border products have few alternatives in the world. For example, DJI drones can raise prices because of their brand strength.

There are few places that can replace China in the production of many small light - industrial products and electronic products. For example, for audio products such as speakers and headphones, even if they are produced in Vietnam, the bosses are mostly Chinese, and the materials are basically imported from China. Chinese enterprises have the confidence to raise prices.

No matter what the final tariffs are, price increases are basically the only way for cross - border e - commerce sellers.

In the future, the US market may need to be analyzed in two situations. During the pandemic, Trump issued cash to stimulate consumption. If he distributes money during this tariff negotiation, it may have no impact on business, and the demand may even increase. However, if the situation gets worse, prices will rise, and people will have less money. Non - essential products will definitely be affected.

If there is a rush to buy, the conversion rate suddenly increases, and the order volume increases, we need to prepare to raise prices. Otherwise, it will be troublesome if the goods are sold out. If the demand decreases, we can't lower prices because of the increased tariff costs. Raising prices is basically the only option.

Currently, there are no obvious changes in the sales volume and customs clearance situation in the US market. Let's wait and see. The current situation is like an earthquake wave, a bit chaotic. For example, logistics providers are definitely asking around: How is the goods intake? Is there a queue at the customs? If the logistics company officially notifies a price increase, the company will also get nervous. The exchange rate is also a concern. We need to study and predict whether to hold US dollars and whether the RMB will appreciate or depreciate.

The only problem now is that Chinese people like to fight among themselves. In fact, there is nothing wrong with raising prices. Just do it. Buyers can take it or leave it.

Li Xingrui, a medium - large seller in the intelligent ecosystem vertical category, Dingrui Intelligent Ecosystem:

The products I operate, such as intelligent electric mobility, smart home, intelligent consumer electronics, intelligent pet products, and intelligent health and beauty products, are all within the scope of the tariff increase. Some of them have been seriously affected. I'll just talk about two types of products.

The first is intelligent electric mobility products. The US has always imposed additional tariffs on Ebike - related products. Since I started doing cross - border e - commerce in 2014, because of our early layout, we have created the self - balancing scooter and Ebike brand “SWAGTRON”. We use a compliant and traditional export model and have our own subsidiary companies in Hong Kong and the US for local operations. Compared with other sellers, we have a slight advantage.

Now, as the tariff situation becomes more intense, it will have a great impact on both offline and online Ebike sellers. Moreover, the threshold for Ebike products is very high, and the requirements for battery safety certifications are particularly strict. If the tariffs increase, the logistics costs will also increase significantly, making it even more difficult to do business in an already highly competitive market.

The second is intelligent consumer electronics. China is the world's manufacturing factory and has the most complete supporting supply chain. The fundamental reason why we have been able to sustain our business from traditional foreign trade to cross - border e - commerce is the depth and comprehensiveness of our supply chain. The technology industry is highly competitive and内卷. After the US crackdown, it will be even more difficult. In the past, we could solve the tariff problem by transferring the supply chain, but now, countries such as Vietnam have also been subject to tariff increases. Considering all aspects, it is better to stay in China because of the complete supporting facilities, price advantages, and labor force advantages. Transferring out is meaningless.

Of course, the issues of tariffs and Sino - US trade frictions have always existed. People have become used to it, just like frogs in warm water being slowly boiled. However, we didn't expect this time to be so intense, unprecedentedly so.

In terms of coping strategies: First, China has a very complete set of supporting facilities. We can optimize the supply chain or intermediate links, and compress a little in each link for mutual benefit; second, currently, we are all about brand - building for overseas markets. We should continue to increase the global brand layout, enhance the competitiveness of technology, refine our products, and increase the product premium and popularity. China is the world's factory. Even if the tariff pressure is high, unless Americans stop using these products, they have no choice but to purchase from China indirectly because other countries do not have a mature supporting supply chain; third, don't put all your eggs in one basket. The cross - border e - commerce industry has enough confidence to optimize the product supply chain. China accounts for such a large share of the world market. If one area doesn't work out, another will. Don't just focus on the US market. We should continue to go global, expand platforms and channels from a global perspective, and don't just compete in the US market.

For cross - border e - commerce sellers, we have multiple optimization methods. According to conventional practices: First, price increases are definitely necessary. If the product has strong monopoly power, no matter how much the price is increased, there will always be buyers. If the products are highly homogeneous, increasing the price by a few dollars won't solve much problem, but the customer loss will be serious. There is a balance to be considered here; second, the issue of brand. For example, Anker and DJI have high brand recognition and strong acceptance overseas. For products like DJI, which have a very high global monopoly, there is not much difference between increasing the price by one dollar or one hundred dollars. Why not raise the price? However, for new brands, if the price is increased, they will have poor cost - effectiveness and low technological content, and they will be in a more passive position.

Third, for most cross - border sellers, multiple methods need to be combined. For example, slightly increase the price, compress the supply chain cost, optimize logistics, and promote through multiple in - station and out - station channels, and sell on multiple platforms. We may earn less but won't lose money. It's all about weighing the monopoly degree, market share, technological content, brand premium ability, supply chain, and optimization ability of our products. We can't rely solely on price increases.

After the tariff increase, cost digestion is a big problem. Some small sellers may consider using other non - tax - refund methods because of the high operational difficulty. I have always operated in a compliant manner, so my costs are higher, and the turnover cycle is relatively longer. For example, the process of export tax - refund from company operation to the actual refund is quite time - consuming and labor - intensive.

We can compress some costs from the supply chain end, but the effect is limited. Large companies can still reduce costs if their production volume is sufficient, but if small companies try to compress costs, the factories may simply abandon them.

Overseas warehouses will definitely increase in price. After the cancellation of T86, everyone will send goods to overseas warehouses. I estimate that there will be a wave of order surges in overseas warehouses. For sellers who used to do direct shipping from China, the cost has increased so much. Unless they can bear the increased tariff costs, they have to use overseas warehouses. Whether they can bear the cost of overseas warehouses is also a question.

Currently, I don't plan to adjust the product categories, but I will cut some products with low profits. I will keep products closely related to people's lives. However, if the profit of a product is low, there is basically no point in doing it. It also depends on the sales volume of the product. If there is a possibility of an increase in volume in the long term, we can continue to do it. If there is no future and the cost continues to increase in the short term, then we definitely won't do it.

The continuous tariff increase by the US is harmful to everyone. I have considered expanding to other sites and platforms, but I still won't give up Amazon and the US market. The US is the world's largest consumer electronics market. Generally speaking, I think no one will give up the US market.

Lin Feng, a small Amazon seller:

Previously, I was engaged in Temu's full -托管 business. By the end of last year, I decided to give it up. Mainly because the profit and sales volume were both poor. The profit at that time was less than 10%. It was completely meaningless to continue. Moreover, Temu's buyers also told us privately: We should switch to semi -托管 as soon as possible, and they will no longer provide traffic support for full -托管.

Now, I'm back to doing FBA warehouse business on Amazon. If I do semi -托管, I don't have the advantage of overseas warehouses. It's better for me to send the goods to the FBA warehouse. For us platform sellers, no matter what happens, the Amazon platform is the safest.

There is a very strange thing. Amazon is making great efforts to promote its low - price store business, but they haven't made it public. Many of my friends have received emails from Amazon inviting them to join the low - price store.

I feel that sellers on Amazon who can achieve a daily order volume of two or three hundred (and operate multiple SKUs) will receive the invitation email. There should be an internal screening mechanism, but the order volume requirement is not high. My account hasn't received the email because I sold very few products before.

My seller friends all find it quite strange and don't know how Amazon will carry out this business after the cancellation of the small - value exemption policy. However, friends who have received the invitation are generally willing to try to join this business. For sellers, having more sales channels is definitely a good thing, and the cost of trial and error is not high. The value of a single product is only a few dollars. I can accept sending dozens or hundreds of them.

Regarding the tariff issue, I contacted the manager of Amazon Fresh. They said to suspend shipments first and wait for their notice. I don't know what's going on. In fact, personally, I think the impact of tariff increases on small Amazon sellers is not as serious as expected. Even if the tariffs increase significantly, reaching 100% or even 200%, it's a good thing, not a bad thing.

Currently, the logistics cost will increase. The problem with Amazon's warehouses is not just the price increase. Their algorithms are very complex, and it's difficult for newbies to understand. The warehouse fees are quite high.

Amazon warehouses are generally divided into standard - sized and large - sized items, such as clothing and kitchenware. For people who deal with large - sized items and have relatively abundant funds, it is more difficult to control costs. For standard - sized items, it depends on the cost - control ability. I have a friend who can control the Amazon warehouse cost to 6% of the total cost.

I dare say that after the tariff increase, no small seller dares to raise prices. First, the competition among sellers is extremely fierce. If you raise the price, the sales volume will drop. Once the sales volume drops, your ranking will drop, and then the sales volume will continue to decline in a vicious cycle; second, the profit of small Amazon sellers should be able to cover the current increased costs.

Brand - type sellers are in a different situation. They have investors and factory support behind them. When the cost rises, they can raise prices to maintain profits.

For us small sellers, if the cost increases, we can only accept less profit. We can't let the sales volume decrease. I may operate the whole process more meticulously and save a little cost from other aspects to maintain my profit. For example, currently, I may reduce advertising investment to save advertising costs, but I won't raise prices.

When it comes to the factory side, cost - compression is actually a daily task. We try to compress as much as possible. However, if we keep pressing the price down, the factory has no choice but to cut costs and produce low - quality products, which will form a negative cycle. To some extent, I don't want the factory to lower the price because I'm afraid that if the quality drops, it will lead to poor product reviews. As a small - scale seller, I don't have the ability to ask the factory to increase a little cost and improve the quality, and the factory won't agree. There are many problems in this game.

Like some big - seller friends I know, they have the ability to send personnel to the factories to strictly control the cost and quality during the production process. However, we small sellers lack such resources and capabilities.

Now, the good thing is that cross - border e - commerce is very important, and the supervision of small and medium - sized sellers won't be tightened. If the state strictly supervises, small and medium - sized sellers will face great difficulties in operation, and a large number of them may even withdraw from the market, which will then affect the product sales of upstream factories and lead to over - capacity in factories. I judge that the state will adopt a relatively lenient attitude towards small and medium - sized sellers at this stage.

Now, everyone is quite anxious. When having meals or chatting, people always talk about the tariff issue. There is a strong sense of crisis. However, no one has withdrawn, and more people are even entering the cross - border e - commerce industry.

At first, I was doing business in the European market on Amazon and also on Temu. However, Europe has very high compliance requirements. The US is not as complicated as Europe. Now, we should expand to multiple countries.

Next, I plan to explore the Middle East and Central Asian markets. I have a factory - owner partner who has opened a factory in Dubai. I went to see it and thought it was quite good. Since I have such resources, I'll just give it a try. The advantage of us small sellers is that “a small boat is easy to turn around.”

This article is from the WeChat official account “36 Krypton”. Author: Zhang Ziyi. Republished with permission.