Updates and Annoucements on Tariffs
Worldwide tariffs are being implemented on goods entering the US. There will be a minimum rate of 10%, but that will climb higher for countries with which the US has a large trade imbalance, such as 20% from the EU, 34% from China, and 46% from Vietnam.
- These rates will go into effect on April 9th.
- The de minimis exemption (goods <$800) for China and Hong Kong will be ending on May 2nd.
- For now, the de minimis exemption is still in place for other countries - but this may change once CBP is set up to collect it globally.
The Trump Administration’s move to close the de minimis loophole by May 2nd has U.S. retailers cheering - with headlines declaring, 'Shein and Temu’s unfair advantage is finally over’.
But the truth is: U.S. businesses will take the bigger hit.
While the de minimis loophole was the original advantage for ultra-fast, duty-free shipping, China-based brands (and U.S. DTC brands smart enough to follow their playbook) have already moved on to an even bigger financial advantage: tariff deferment.
The Real Game Changer? Paying Duties After You Sell
Traditional retailers pay duties upfront - whether their inventory sells or not. But brands like Shein and Temu only pay tariffs after an item is purchased. That means:
- No cash tied up in unsold inventory
- Lower risk, healthier margins (while competitors bleed working capital)
- Same fast shipping, more flexibility
This isn’t just about fast fashion. Any U.S. DTC brand using this model will keep thriving while old-school retailers struggle under the weight of upfront duties.
This isn't speculation. Look at the numbers:
- Shein's U.S. revenue grew 40%+ YoY in 2023 despite increasing trade tensions.
- Traditional retailers like Foot Locker and Nordstrom continue struggling with inventory bloat and working capital shortages.
- The average U.S. retailer has 30-40% of capital tied up in unsold inventory at any given time.
Tariffs Won’t Level the Playing Field - They’ll Widen the Gap
The new tariffs might look like a win for U.S. businesses, but the financial advantage for agile, Chinese brands isn’t disappearing - it’s just shifting.
If you’re an e-commerce or DTC brand manufacturing in China or Vietnam, shipping all your inventory by sea and paying duties on everything (whether it sells or not) is a losing strategy. You should be using direct shipping + tariff engineering instead.
Additional Guidence
- Take a deep breath. While some of these announcements may seem impactful, it's important to remember that the situation is fluid. Many knowledgeable insiders suspect this is the opening gambit of an "Art of the [Tariff] Deal" negotiation that will lead to lower tariffs with countries that are willing to cooperate. For example, see Israel's recent announcement that they have removed all tariffs on US goods; expect to see more such announcements. In other words, it is not recommended to make any major changes to your factory mix or countries of origin just yet, as the situation may quickly change.
- We have you covered. From the moment the Biden administration announced proposed changes to the de minimis exemption, we have spent hundreds of hours with cross border lawyers, customs brokers, cargo space providers, etc. to prepare for this moment. Thanks to all the time we invested with our partners to understand the rules, our product and engineering teams to implement them into our merchant portal, and our ops team to find compliant shipping solutions, your goods will continue to ship as usual.
- Help us help you. In order to ensure that your goods pass through customs quickly and efficiently, we need your Cost of Goods & HTS codes for all SKUs we service at Portless. Please ensure your Cost Per Item & HS Code sections on your Shopify Product page are correctly filled.
- How this will work. Using the data in your merchant portal, we will lay out the tariffs on your behalf and will invoice you with the final rates once we receive them. As long as you give us the necessary data, you should not need to do anything else.
- There will likely be some bumps in early May. After the February 4th brief removal of de minimis, we saw massive spikes at CBP as they struggled to handle the load, leading to delays of 3-5 days obtaining clearances. This time, they have a month to prepare, but it is still wise to assume there will be a few days of delays during the first week or two of May.
Opportunities
- Vietnam may be a good solution for now. While we don't recommend switching manufacturing countries yet, if you do have any production in Vietnam, you can utilize our Vietnam fulfillment center to get de minimis benefits for as long as those are in effect.
- Tariff deferment will help your cash flow. By using Portless, you have one major advantage over other ecom merchants when it comes to tariffs: in a traditional supply chain, the merchant pays tariffs on the entire container the minute it enters the US - even if they don’t sell the goods for weeks, months, or ever! But by using Portless, tariff deferment is naturally baked in; the tariff is only due once you have already sold the item. This way, tariffs are deferred until there is enough cash to pay for them, and you never need to pay tariffs on slow or unsold inventory.
We realize there are many more questions than we can cover here. We have opened a live FAQ that is available here to help answer more questions: US Tariffs FAQ (April 2025)
We hope this helps but please reach out with any questions or comments!
How Portless Helps You Compete (and Win)
At Portless, we help U.S. brands leverage the same financial advantages as Shein and Temu - without the logistical headaches.
- No cash trapped in unsold inventory
- Lower risk, stronger margins
- Only pay tariffs on what you sell
- Same fast shipping, better economics
If yesterday’s tariff news has you scrambling, there’s a better way.
Contact us today to slash costs with tariff deferment, streamline shipping, and free up cash flow - just like the big players.
