The Impact of Trump’s Tariff Policy Shift on Amazon Sellers: Challenges for Chinese Sellers and Opportunities for U.S. Merchants

On February 7, 2025, former President Donald Trump signed an executive order eliminating the $800 de minimis exemption for goods imported from China. This long-standing rule had allowed packages valued under $800 to enter the U.S. tariff-free, powering the rise of Chinese e-commerce sellers on platforms like Amazon. Just two days later, on February 9, implementation was paused—U.S. Customs and the postal service weren’t equipped to enforce the new tariffs. Yet, the consensus is clear: this policy will likely resurface once logistical kinks are ironed out. When it does, it will reshape the Amazon ecosystem, hitting Chinese sellers hard while opening doors for American merchants, particularly in niches like customized products.

For Chinese Amazon sellers, the impact hinges on their fulfillment model. Sellers using Fulfillment by Amazon (FBA), shipping goods in bulk to U.S. warehouses, will see minimal disruption since the de minimis rule primarily benefits small, direct-to-consumer packages. However, those relying on Fulfillment by Merchant (FBM) with direct shipping from China face a tougher road. These sellers, often dealing in lightweight, low-cost items, will encounter steep cost hikes and delivery delays that threaten their viability.

Consider a phone case shipped from China. Before the policy, a fast 10-day delivery service cost about $5. Post-tariff, sellers will face an additional $2.50 in customs fees plus a 10% tariff on the item’s value—adding at least $3.50 per package. Delivery times could also stretch from 10 to 14 days or more due to customs processing. For sellers with slim margins in Amazon’s cutthroat marketplace, this could be devastating.

To cope, many Chinese FBM sellers may shift to overseas warehouses, using sea freight to stock U.S.-based facilities or converting to FBA for faster order fulfillment. This works for mass-produced goods but falters for customized or print-on-demand (POD) products, which rely on on-demand production in China. A stainless steel name necklace, for instance, costs around $3 to make in China versus over $10 in the U.S., thanks to optimized production lines. Add $3.50 in tariffs and fees, plus four extra days in transit, and these sellers lose their edge—pricing themselves out of competition and frustrating Amazon’s speed-hungry customers.

This is where U.S. sellers can shine. The tariff policy creates a unique opportunity to dominate the customized and POD market, a segment Chinese sellers have long controlled due to low costs and the de minimis loophole. With Chinese competitors sidelined by rising shipping costs and delays, American sellers can leverage local production to offer faster delivery and competitive pricing. Platforms like Amazon Handmade and Etsy, which cater specifically to artisanal and personalized goods, amplify this advantage.

Amazon Handmade, a dedicated marketplace for crafted items, and Etsy, a haven for unique, custom products, are tailor-made for U.S. sellers looking to seize this moment. A U.S.-based seller producing that $10 stainless steel necklace can avoid tariffs entirely, ship in days rather than weeks, and undercut Chinese sellers’ post-tariff prices. Similarly, POD products like custom t-shirts or mugs—where speed and personalization are paramount—become more viable when produced domestically. By listing on Amazon Handmade or Etsy, U.S. sellers can tap into a customer base that values quality, fast shipping, and the “made in America” appeal, all while Chinese sellers struggle to adapt.

This policy effectively builds a trade wall that Chinese custom-product sellers can’t easily scale. Unable to pre-stock unique items in overseas warehouses, they’ll face a stark choice: absorb the extra costs, pass them onto consumers (risking lost sales), or exit the U.S. market. Meanwhile, American sellers gain breathing room to establish themselves as go-to options for personalized goods—a rare chance to reclaim a lucrative niche.

Success won’t come without effort. Scaling local production means investing in equipment, labor, or partnerships with U.S. manufacturers, and costs may not yet match China’s economies of scale. However, platforms like Amazon Handmade and Etsy lower the barrier to entry by connecting sellers directly with buyers who prioritize craftsmanship over rock-bottom prices. U.S. sellers can also lean into marketing advantages—highlighting shorter shipping times and domestic production—to build brand loyalty.

Looking ahead, if this tariff policy sticks, it could redraw the Amazon and e-commerce landscape. Chinese sellers may pivot to bulk FBA shipments or focus on other regions, ceding ground in the custom-product space. For U.S. sellers, the opportunity is clear: platforms like Amazon Handmade and Etsy offer a springboard to turn this policy shift into a competitive edge. By acting now—ramping up local production and targeting these marketplaces—American merchants can position themselves for outsized success as Chinese competitors fade. In a market defined by speed and adaptability, this could be the moment U.S. sellers have been waiting for.