International trade & tariff changes: what brands need to know
Tara Daly
·February 11, 2025
The international trade landscape is shifting rapidly, with new tariffs and policy changes potentially affecting businesses that manufacture abroad and sell to the U.S. market. Here's what you need to know about these changes and how to adapt your business strategy.
Key Changes in Trade Policy
New U.S. Tariff Structure
- A flat tariff of 20% may be applied to all Country of Origin China products. Based on the sale price and not the cost of goods.
- A flat tariff of 25% may be applied to all Country of Origin Mexico or Canada products, or products simply imported from Mexico or Canada. Based on the sale price and not the cost of goods.
- The De Minimis exemption for Origin of China products was eliminated at the start of February but then that decision was paused on February 8th.
- These changes will lead to increased costs of goods sold (COGS) for affected brands
- The previous strategy of using foreign 3PLs to process Chinese goods before shipping to the U.S. is no longer a viable or stable solution
Impact on U.S. Exports
- Brands may face retaliatory tariffs on exports to these countries:
- China has imposed up to 15% retaliatory tariffs on some U.S. goods
- Canada has imposed 25% retaliatory tariffs on U.S. goods
- Mexico plans to announce retaliatory tariffs soon
- The EU has announced tariffs on certain U.S. goods worth around $28 billion (26 billion euros), that are planned to go into place starting on April 1st
For more detailed information on tariff changes, check out our dedicated page here (updated frequently as more information develops).
How to Navigate These Changes
1. Evaluate Your Supply Chain
Review Manufacturing Origins
- Assess your exposure to affected regions with Country of Origin
- Consider diversifying suppliers and manufacturing locations
- Evaluate the possibility of moving production to countries where the de minimis exemption still applies
Analyze Costs and Operations
- Factor in new fees including tariffs, processing fees, and storage
- Consider shifting to U.S.-based operations if currently using foreign 3PLs
- Evaluate regional fulfillment options
Loop can connect U.S. brands with a trusted domestic fulfillment partner to ensure a smooth transition.
2. Prepare for Increased Costs
Brands should take the offensive and prepare for changes and an increase in their cost of goods sold (COGs).
Brands should look for providers that can:
- Help them with agility from a compliance standpoint so they can calculate all the landed costs accurately
- Ensure accuracy of declarations with classifications to 10 digits, alongside upfront Electronic paperwork submissions to customs there are no penalties and fines, and at the very least that there are no delays in customs clearance that can add more fees
- Leverage multi-carrier network so they can adapt quickly to ones that can support the optimal lanes in a cost effective manner
- Work with a global partner that can help optimize the supply chain across manufacturing B2B and DTC regionally.
3. Stay Informed
Keep up with rapidly changing regulations through reliable sources:
- Industry experts and consultants
- Peer networks and communities
- Trusted vendors and partners
- Specialized trade publications
4. Take Action While Maintaining Perspective
Focus on What You Can Control
- Don't get paralyzed by trying to predict every scenario
- Make decisions based on current, verified information
- Maintain flexibility in your strategy
- Be prepared to adjust as conditions change
Support Resources
You don't need to navigate these changes alone. Consider working with experts who can help you:
- Connect with reliable 3PLs
- Ensure compliance with new regulations
- Optimize your import strategy
- Understand how other brands are adapting
Looking Ahead
While the current trade environment presents challenges, businesses that take proactive steps to adapt their operations and maintain flexibility will be better positioned to succeed. Focus on building a resilient supply chain that can weather policy changes while maintaining cost-effectiveness.
Need help navigating these changes? We’re here to help you with all of these steps. Reach out to Loop’s Partner team at partnerships@loopreturns.com if you need recommendations for trusted experts, consultants, and logistics partners in the international trade space.
In this article
Stay in the loop
Subscribe for product updates and Loop's biweekly newsletter.
Retain more revenue with Loop today
With Loop, your brand can offer everything from refunds to direct exchanges to shopper incentives and more. Even better? These exchanges build your business.