What’s a tariff?
A tariff is a tax imposed by a government (in this case, the U.S. government) on imported or exported goods.
When a country places a tariff on imports, it causes foreign-made products to be more expensive. On the positive side, tariffs may encourage consumers to buy locally made goods and help domestic businesses by reducing the competition they face from abroad. On the other hand, tariffs may raise prices for businesses (and their consumers) and limit choices.
There are three different types of tariffs:
Ad valorem tariff: A percentage of the value of the goods
Specific tariff: A fixed amount per unit of the good (for example, $5 per ton of steel)
Compound tariff: A combination of both
What are de minimus imports?
De minimus imports refer to imports that are exempt from tariffs and taxes because their value is so low. Typically, imports that have a value below $800 are not subject to tariffs; if you’ve ever ordered a bunch of clothes from a Chinese e-commerce retailer (like Temu or Shein), and you’ve spent less than $800, you got a de minimus package. E-commerce retailers that ship across borders benefit from the general exemption of tariffs on their goods.
However, under the Trump administration, this policy has changed: de minimus imports from China are now subject to a 125% tariff.
Why is everyone talking about tariffs now?
President Trump has announced a universal baseline tariff of 10% on all imported goods to the U.S.
He imposed a much higher tax on China (which imposed its own tariff in return); however, on May 12, 2025 the Americans and the Chinese came to an agreement to pause tariffs for 90 days. On August 11, the two sides agreed to another 90-day delay, ending November 10, 2025.
Who is responsible for paying for these tariffs?
The importer is typically the one who ends up paying for a tariff. This means that if you own a business that imports goods from China, you will be responsible for payment.
In many cases, the final cost of the tariff trickles down to consumers in the form of higher prices for the imported goods.
Here’s how it works:
The importer pays the tariff: When goods arrive at the border, the importer must pay the tariff to customs before they can bring the products into the country.
Price increases for consumers: Importers may pass the added cost of the tariff onto consumers by raising the price of the goods. This is common with products that are in direct competition with domestic goods.
Domestic market impact: If tariffs make foreign goods more expensive, domestic products may become more attractive to consumers, which can increase demand for locally made items.
How will these tariffs affect my business?
Many small businesses will feel the effects of tariffs quite quickly.
Here’s what you should know:
The cost of goods you import will increase.
Supply chains may be affected, which means that you may experience challenges or delays getting your imported materials.
You may feel the pressure to increase prices for your customers, which may affect your relationships and patronage.
What can I do to minimize the impact of tariffs on my small business?
Reasses your supply chain: If you import goods from any of the affected countries you may want to consider other options. Can you get your materials from somewhere else?
Renegotiate supplier contracts: If getting your goods locally (or from an unaffected country) simply isn’t possible, talk to your suppliers about adjusting their prices.
Evaluate your inventory: It may take months for your existing inventory to sell out. Understand what you’ve got and when you’re going to need to order more materials; plan appropriately and take the time to get your finances in order, which leads us to . . .
Cut costs where you can: Assess your entire operation. Is there somewhere else you can streamline and cut costs? Review your overhead and eliminate any non-critical cost
Remember that this is a dynamic situation: The landscape is continually shifting, so be sure to stay on top of the news.
Continue to check back here—we’ll keep you posted on any changes that may impact your business.
