[COMPLETE GUIDE] What the New U.S. Tariffs on China Mean for Creators and eCommerce Brands

Formed by Telos Media for our Creator Economy peers, this guide unpacks the most important takeaways from the upcoming tariff changes.

We've done 19 hours of research to understand how to navigate over $50,000 in incoming tariff charges so you don’t have to.

Big changes are coming that could significantly impact the cost of shipping goods from China to the U.S. especially for creators and brands who rely on global fulfillment partners. Starting May 2, 2025, new tariffs and fees on low-value imports from China and Hong Kong will be enforced, changing the game  for DTC businesses.

This follows a broader tariff update announced on April 15, 2025, where the U.S. imposed new rates of up to 245% on Chinese imports. 

That includes:

• A 125% reciprocal tariff,
• A 20% fentanyl-related tariff, and
• Additional Section 301 tariffs ranging from 7.5% to 100%, depending on the product.

These changes are part of a broader crackdown on trade imbalances and are already starting to affect product categories including toys, collectibles, and consumer goods.

Here’s a full  breakdown of what’s happening and what you can do about it.

How are tariffs calculated?

Tariffs are usually calculated using this formula:

Tariff = (Cost of Goods + Insurance + Freight) × Tariff Rate

*Note: We've come across articles, where insurance and freight were not mentioned in the calculation of the amount subjected to tariff (dutiable amount). While this doesn't necessarily indicate they are excluded, their absence in the examples raises questions about whether they are always considered.

Keep in mind that certain goods may be subject to flat per-package fees, especially under the new rules for low-value imports.

What is the De Minimis Exemption  and is it going away?

If you’ve been shipping low-value items (under $800) to the U.S. duty-free, this exemption is about to change. Historically, shipments valued at $800 or below were exempt from tariffs under the de minimis rule. But starting May 2, 2025, low-value shipments from China and Hong Kong will no longer be exempt.

What’s changing:

• Shipments will be subject to a 120% tariff or a flat fee per package, whichever is higher
• The flat fee starts at $100 per package on May 2, and will increase to $200 per package starting June 1.

This shift significantly impacts direct-to-consumer models that rely on shipping individual customer orders from overseas.

Does re-routing through third countries (like Vietnam or Mexico) help?

You might be thinking, “What if I just ship through a different country to bypass these tariffs?”

That won’t work.  U.S. tariffs are based on country of origin, not country of shipment.

• Simply shipping through Vietnam doesn’t change the fact that the product was made in China.
• To legally change the country of origin, substantial transformation must occur in the third country—a light reassembly or repackaging doesn’t count.
• Attempts to misdeclare origin could lead to penalties or shipment rejections.

What is consolidated shipping and why is it essential now?

Consolidated shipping bundles multiple individual customer orders into one bulk shipment sent to the U.S., where orders are later distributed domestically.

This is going to become our best friend moving forward. Why? This strategy helps us bypass the per-package tariffs, as one tariff is applied to the entire consolidated shipment instead of each individual package.

Here’s how it works:

1. Each order is packed separately with the buyer’s details.
2. All parcels are grouped together into one larger shipment.
3. The consolidated shipment is sent to a U.S. warehouse, where it clears customs.
4. Once cleared, individual orders are then shipped domestically within the U.S. via carriers like USPS or FedEx.

This approach allows us to keep shipping costs at bay and ensures we’re complying with the new tariff regulations.

How it could look in the structure

Sample Calculation of Tariffs

 $800 and below value item calculation (when not using consolidated shipping)

Consolidated shipping calculation (Other than International Postal Network - UPS, FedEx, etc.)

Can reclassifying products under different HS codes help?

Unfortunately, no HS code “magic” can eliminate any extra tariffs for China right now as the 145% apply broadly to virtually all codes, with the only exception of tech. 

Who pays the tariff—seller or buyer? How?

The importer of record is the party responsible for paying U.S. import tariffs. This is typically the U.S.-based buyer, a freight forwarder, or a customs broker acting on behalf of the buyer.

How tariffs are paid depends on the shipping terms — mainly whether it’s DDP or DDU.

DDP (Delivered Duty Paid)

 ✅ Best for smooth customer experience.

• The seller takes full responsibility for import duties and taxes.
• The seller (often via a logistics partner or customs broker) acts as the importer of record.
• All applicable U.S. tariffs are paid before the package is delivered to the buyer. The customer doesn’t pay anything extra after placing the order.

DDU (Delivered Duty Unpaid)

⚠️ Lower upfront costs for the seller, but risky customer experience.

• The buyer is responsible for paying duties and taxes once the goods arrive in the U.S.
• Shipments are often held by customs until the buyer pays.
• This can lead to delays, surprise charges, or rejected deliveries.

DDP vs. DDU: Quick Comparison

What can we do now?

• Ship before May 2

Get all backlogged inventory shipped out before the tariffs take effect to avoid paying the higher costs. If you have products ready to go, now’s the time to move fast. You might even consider running a limited-time promo or sale to encourage early purchases and clear inventory before the new rules kick in. It’s a win-win for both your margins and your customers.

• Consider transitioning to consolidated shipping

If you're currently shipping individual orders, it may be time to explore switching to consolidated shipping to help avoid the new per-package fees. Look into suitable logistics partners who can support this model and assess if it's a fit for your operations.

• Test shipments under the new tariff system

After May 2, consider running a small batch of shipments to see how the new rules affect your costs and timelines. Use this to spot hidden fees, check customs speed, and adjust pricing or fulfillment before scaling.

• Look for backup suppliers outside of China

It’s always a good idea to diversify your supply chain. Start researching suppliers from countries not affected by these tariffs. This can help mitigate risk and give you more flexibility in the long run.

• Communicate changes to customers

Be transparent with your customers. If there are any price increases or delays due to the new tariffs, let them know ahead of time. Update your FAQs, shipping policies, send out a mass email to your customers, or publish a Tariff Impact Statement like what Makeship did https://partners.makeship.com/tariffs.

• Monitor closely

These tariff changes are part of an evolving trade policy. Keep an eye out for future updates to stay ahead of any new developments that could further impact costs or provide new opportunities. Set up alerts, work closely with your logistics partners, and adjust your strategy accordingly.

What’s Next?

One of our suppliers mentioned there’s a chance this broad tariff might eventually move toward a more category-specific approach. If that happens, items like toys and plushies MAY get some relief (unlike, say, cars/automobiles).

But as of now, nothing’s confirmed. Better to plan for the current rules, and adapt quickly if and when things evolve.

TL;DR:

We’re dealing with a shifting policy landscape, but we’ve got options. Let’s play this smart.

If we get ahead of it now, we won’t just stay compliant, we’ll stay competitive.

🔁 Feel free to share this guide with any fellow creators or business owners who might be affected. We're all in this together!

[Disclaimer: All information, rates, and examples in this article are accurate as of April 18, 2025.]

Prepared by the Telos Media team: Oliver Gilpin , Leica Chang, MBA , Isabel Dawn Salise , Venus O. , Elyn Rose Tabarangao

In case helpful: Cyan Cooper , Leeland Winfree , Mario Joos ,  Ian Shepherd , Lucas Desgrosellier , Scott Van den Berg , Aniket Mishra , Matt Koval , Josh Mattingly , Avi Gandhi (Creator Logic) , Marlon Doll , Sina Sahami , Shane Uriot , Mahesh Shenoy , Olivier Delfosse , Thatcher Mines , Dan Whateley , Rajiv Seebs , Kenny A.

Sources:

https://www.avalara.com/blog/en/north-america/2025/02/how-to-handle-us-china-tariffs-de-minimis.html#:~:text=The 

https://www.whitehouse.gov/presidential-actions/2025/04/modifying-reciprocal-tariff-rates-to-reflect-trading-partner-retaliation-and-alignment/ 

https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-ensures-national-security-and-economic-resilience-through-section-232-actions-on-processed-critical-minerals-and-derivative-products/

https://ustr.gov/issue-areas/enforcement/section-301-investigations/search 

https://www.avalara.com/blog/en/north-america/2025/02/how-to-handle-us-china-tariffs-de-minimis.html

https://www.investopedia.com/terms/i/import-duty.asp#:~:text=Calculating https://www.trade.gov/harmonized-system-hs-codes

https://flavorcloud.com/understanding-country-of-origin/#:~:text=Determining https://tchelete.com/how-do-i-handle-customs-duties-for-dropshipping-from-china-to-the-us/?utm_source=chatgpt.com