In the fast-paced world of global commerce, tariffs are one of the key factors shaping business operations. For small business owners, side hustlers, and entrepreneurs, the ripple effects of tariffs can drastically affect pricing, costs, and even market competitiveness. In April 2025, United States President Donald Trump, announced new tariffs that are reshaping trade dynamics. Whether you’re an e-commerce seller, a dropshipper, or a freelancer dealing with international clients, understanding how these changes impact you is crucial to navigating the market.

In this article, we’ll break down how the recent tariff increases—put in place by the Trump administration—affect U.S. businesses and side hustlers, whether they import goods, export products, or rely on international supply chains.

What Are Tariffs?

A tariff is a tax imposed on goods when they are imported or exported between countries. The primary goal of tariffs is to protect domestic industries, balance trade deficits, and generate revenue for governments.

For example, when a U.S. company imports a product from another country, the government may impose a tariff on that item, making it more expensive. As a result, businesses that rely on imported goods must decide whether to absorb the additional cost or raise their prices for consumers. Tariffs can have a profound impact on small businesses that depend on international trade for materials, products, or sales.

Recent Developments: Trump’s April 2025 Tariffs

In April 2025, Trump enacted a series of sweeping tariff measures designed to address perceived trade imbalances and boost domestic manufacturing. These policies mark a shift toward protectionism, potentially affecting all businesses that engage in cross-border trade.

Some of the key measures include:

1. General Tariff Increase: A general tariff rate of 10% has been applied to a wide range of imported goods, raising the average tariff rate from 2% to over 20%. This impacts nearly every sector, including electronics, clothing, and machinery. This was implemented 5 April 2025. In addition to the percentage-based tariffs, beginning May 2, 2025, a flat duty of $25 per item is applied to all low-value shipments (under $800) from China and Hong Kong. This duty is calculated as either 30% of the item’s value or $25—whichever is higher. This flat fee will further increase to $50 per item starting June 1, 2025. Previously, shipments under $800 qualified for duty-free entry under the “de minimis” rule, but that exemption is now revoked for China and Hong Kong.
2. Country-Specific Tariffs: Tariffs have been imposed on specific countries with rates reaching up to 54%. Countries like China have been hit particularly hard, impacting businesses that depend on low-cost goods from these regions.
3. Sector-Specific Tariffs: Industries such as the automotive sector, which imports vehicles and components from foreign countries, have been targeted with specific tariffs of 25%.

Here is a breakdown of the top 20 increase in tariff rates exceeding 10%, organized by the size of each country’s trade deficit with the U.S. I.e, a country sells more goods and services to the United States than it buys from it. These will be implemented on 9 April 2025.

Country	Tariff rate	Trade deficit
China	34%	$295.4 billion
European Union	20%	$235.57 billion
Vietnam	46%	$123.46 billion
Taiwan	32%	$73.93 billion
Japan	24%	$68.47 billion
South Korea	26%	$66.01 billion
India	27%	$45.66 billion
Thailand	37%	$45.61 billion
Switzerland	32%	$38.46 billion
Malaysia	24%	$24.83 billion
Indonesia	32%	$17.88 billion
Cambodia	49%	$12.34 billion
South Africa	31%	$8.84 billion
Israel	17%	$7.43 billion
Bangladesh	37%	$6.15 billion
Iraq	39%	$5.76 billion
Philippines	18%	$4.88 billion
Guyana	38%	$4.06 billion
Pakistan	30%	$2.99 billion
Sri Lanka	44%	$2.65 billion

Impact on Imported Goods

The most immediate effect of tariffs is an increase in the cost of imported goods into the U.S. For businesses that import products from other countries, tariffs add to the expense of those products, which can directly affect the final price that consumers pay.

For shipments from China and Hong Kong valued under $800, a new flat duty of $25 per item (or 30% of item value, whichever is higher) applies starting May 2, 2025. This increases to $50 per item on June 1, 2025. This change eliminates the previous duty-free treatment for low-value imports from these countries.

Example: E-Commerce Sellers

If you’re running an e-commerce store and you rely on importing products from China or other countries into the U.S., the tariffs could affect your pricing strategy.

For example, if you sell home decor items imported from overseas and the cost of importing them increases by 15%, you may need to adjust your prices.

• Before the Tariff: A decorative vase costs $20 to import, and you sell it for $40.
• After the Tariff: Due to a 15% tariff increase, the vase now costs $23 to import. If you keep the price at $40, your profit margin shrinks. Alternatively, if you raise the price to $45 to maintain your margin, the higher price may deter customers.

Now, if the vase is imported from China and valued under $800, an additional $25 flat duty applies (or 30% of value, whichever is higher), raising the total cost to $48. This dramatically impacts your margins or may necessitate a higher retail price to remain profitable.

Impact on Dropshipping Entrepreneurs

Dropshipping is another business model that could be affected by tariffs. Many dropshippers rely on suppliers in countries like China, and with the recent tariffs, they may see an increase in their costs.

• Example: If you’re running a dropshipping business selling tech gadgets and the U.S. imposes a 10% tariff on imported electronics, your supplier’s price for each item could rise. If you were selling a $30 Bluetooth speaker, the supplier’s new price could be $33 due to the tariff. This increased cost could either reduce your margins or force you to raise prices.

Now, for shipments under $800 from China or Hong Kong, a $25 duty or 30% of the value (whichever is higher) applies starting May 2, 2025—potentially bringing the cost up to $58 per item by June. For small dropshippers, this could eliminate margins unless you adjust pricing or sourcing.

Broader Implications: Domestic Production and Exports

While tariffs are often associated with imported goods, they also have indirect effects on domestic production and U.S. exports.

Domestic Production

Many businesses that rely on raw materials or components from abroad might see increased costs for manufacturing goods in the U.S. For instance, if you run a small furniture-making business that sources wood, nails, or fabric from overseas, any tariff increase on these items could directly raise your production costs.

• Example: If a small business imports fabric from Italy to make high-end upholstery and the tariff on textiles rises by 15%, the cost of producing each sofa would go up. This could result in a price increase for consumers or a reduction in profit margins.

If your raw materials come from China or Hong Kong and are valued under $800, the flat $25 (or 30%) duty now applies per item—impacting even small-volume specialty imports.

Exports

Tariffs can also affect businesses that export goods to other countries. If the U.S. imposes tariffs on imports, countries may retaliate by placing their own tariffs on American-made goods. This can reduce demand for U.S. exports and impact businesses that rely on international markets for sales.

• Example: If you’re a U.S. manufacturer of agricultural products and Japan imposes a tariff on U.S. soybeans in retaliation for U.S. tariffs on Japanese goods, the Japanese market may become less profitable for your business. The added cost of the tariff could make your products more expensive for Japanese consumers, leading to a drop in sales.

China has already announced that they will impose a 34% tariff on imports of all U.S. products starting 10 April 2025.

Strategies for Side Hustlers and Small Businesses

Given the complexity of the new tariff landscape, it’s essential for side hustlers and small business owners to adopt strategies that can help them manage these changes effectively. Here are a few approaches to consider:

1. Diversify Supply Chains

One way to minimize the impact of tariffs is to diversify your sources of supply. Rather than relying on a single country, consider working with suppliers from different regions to spread the risk. For example, if you’re a fashion retailer importing clothing from China, you could explore sourcing from countries like India, Vietnam, or even the U.S., where tariffs may be less burdensome.

Suppliers outside China and Hong Kong still benefit from the $800 de minimis exemption, meaning small shipments may enter duty-free.

2. Reevaluate Pricing Models

In light of increased costs, it may be necessary to reevaluate your pricing model. If tariffs are raising the cost of your products, you may need to adjust your prices accordingly. However, be mindful that raising prices too much could lead to a decrease in demand.

• Example: If you’re selling handmade jewelry imported from Europe, and your cost increases by 15%, you might increase the price by 10% to cover the tariff without alienating your customers. Finding a balance between absorbing some of the costs and passing them onto customers will be key.

For goods from China or Hong Kong, be sure to include the flat duty tax ($25 or $50 depending on date) in your pricing model for shipments under $800.

4. Stay Informed

Keeping an eye on trade policy developments will help you react quickly to tariff changes. By staying informed about upcoming tariff changes, you can anticipate price increases or delays and adjust your supply chain or pricing strategy in advance.

• Example: If you’re aware that new tariffs will be imposed in the next quarter, you could place bulk orders in advance, lock in prices, and reduce the impact on your bottom line. I.e., you may choose to bulk order before May 2 or June 1, 2025, to avoid the new flat duties from China and Hong Kong.

4. Engage with Trade Experts

Consulting with trade specialists or legal experts in international commerce can help you navigate complex tariff regulations. These professionals can advise you on how to minimize the impact of tariffs, identify opportunities for exemptions, and help you ensure compliance with U.S. and international trade laws.

5. Explore Export Opportunities

If you primarily sell in the U.S., exploring international markets can help you offset the costs of tariffs. However, it’s important to understand the trade policies of target markets. Countries like Canada, the European Union, and parts of Latin America may have trade agreements that benefit U.S. exporters.

• Example: A U.S.-based artisan selling handmade goods could focus on building relationships with buyers in the European Union, where tariffs might be lower compared to other countries.

Conclusion

The tariffs introduced in April 2025 by the Trump administration have significant implications for U.S. businesses, especially small businesses and side hustlers. These measures are designed to protect domestic industries and address trade imbalances, but they also present challenges in terms of rising costs and pricing adjustments.

With the elimination of the $800 duty-free threshold for China and Hong Kong starting May 2, 2025, and the addition of a $25 (increasing to $50) flat duty on imports from these countries, the cost of doing business internationally is rising sharply—particularly for small-volume importers and e-commerce sellers.

Whether you’re importing goods for resale, exporting products, or relying on foreign suppliers, it’s crucial to stay informed and adapt your strategies accordingly.

By diversifying supply chains, reevaluating pricing, and staying ahead of trade policy changes, you can continue to grow and succeed despite the challenges posed by tariffs. Remember, agility and foresight are key in today’s complex global trade environment.

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