The Cost Of Doing Nothing: Tariffs Could Cut Into Peak Season Profits For E-Commerce Brands
According to Passport's 2025 survey of e-commerce leaders, 81% of respondents say tariffs are one of their biggest international challenges. More than half have already experienced increased scrutiny from trade authorities in the past year. However, many have yet to adjust their logistics and compliance strategies, putting both margins and customer experience at risk during the most critical sales quarter of the year.
In fact, 7 in 8 e-commerce leaders say they've already raised prices (or plan to) during Q4 2025 to offset expected costs from tariffs and de minimis changes. It's a clear signal that brands are bracing for impact. The question is: Will those pricing moves be enough without operational changes behind them?
Growth alone no longer guarantees profit. Brands that treat tariffs as a secondary concern may find themselves caught off guard. Passport shares what DTC teams need to know about the rising cost of inaction—and how leading e-commerce brands are preparing now to protect performance through Q4 and beyond.
Tariffs Are Reshaping Peak Season Risk
Tariff policy isn't just shifting—it's accelerating. Over the past several months, a series of trade developments have added real cost and compliance pressure for e-commerce brands. As we approach peak season, understanding what's already in effect (and what's coming next) is essential to protecting margins and customer experience.
What's already in effect:
Flat 10% tariff on most imports (effective April 10): A universal 10% tariff now applies to most U.S. imports, replacing country-specific rates for the time being and driving up landed costs across the board.
30% tariff on goods from China and Hong Kong (effective April 10): Chinese-origin products are subject to a combined 30% tariff—10% reciprocal plus 20% trade action—adding significant cost to many e-commerce supply chains.
De minimis ended for China and Hong Kong (effective May 2): All shipments now require full customs clearance and are subject to duties, eliminating a key cost-saving mechanism and increasing documentation requirements.
Stricter customs enforcement across global markets (ongoing): Authorities in the U.S., EU, and other key regions are stepping up audits and penalties for misclassification, undervaluation, and incomplete documentation—raising the compliance stakes.
What's coming Aug. 1:
New reciprocal tariffs of up to 50%: Without finalized trade agreements, imports from major U.S. partners—including Brazil, Canada, the EU, and others—could face steep duty increases just as peak shipping volumes ramp up.
Together, these changes are driving up costs, complicating customs flows, and increasing the risk of surprise fees or delivery delays, right when brands can least afford it.
Global Sales Remain Profitable, Even Amid Rising Complexity
Cross-border e-commerce remains a powerful growth engine. In Passport's 2025 whitepaper, 91% of international merchants said global sales are a profitable revenue stream, with half reporting that international orders account for at least 21% of total revenue.
However, as tariffs rise and trade requirements tighten, that profitability has become harder to protect. Many brands still rely on outdated cross-border models, leaving them exposed to fluctuating costs, customs disruptions, and compliance risks during the most critical sales period of the year.
How Leading Brands Are Getting Ahead of Tariffs
To stay competitive this peak season, leading DTC brands are reevaluating their fulfillment strategies and approaching global sales with a sharper operational lens. Top-performing teams aren't just reacting to new tariffs—they're building fulfillment infrastructure that supports profit and performance in a more complex trade environment.
1. In-country enablement for high-volume markets Relocating inventory into key destination markets reduces tariff exposure, improves customs clearance, and opens access to domestic-only sales channels like Amazon and Walmart. It also enables faster shipping, easier returns, and tighter inventory control—key advantages during the holiday rush, when customer expectations are at their peak.
In many cases, in-country enablement has shifted from a cost-control tactic to a growth driver. Brands are using it to unlock new revenue streams, meet marketplace requirements, and deliver a better post-purchase experience.
2. Smarter cross-border strategies for emerging markets For regions where in-country warehousing isn't yet justified, brands are investing in tools to make cross-border shipping more predictable and cost-effective. This includes calculating landed costs more accurately at checkout, streamlining customs documentation, and collecting tax IDs in applicable markets to avoid delivery delays.
Alongside operational improvements, many brands are also revisiting pricing strategies—testing duty-inclusive pricing and experimenting with different shipping configurations to offset rising costs without hurting conversion. These trends have emerged across recent industry research and reflect how leading e-commerce teams are adapting to a more complex cross-border environment.
Rather than applying a one-size-fits-all approach, leading brands are segmenting their international strategy—localizing where the volume supports it, optimizing cross-border operations elsewhere, and adjusting pricing in response to evolving tariff and compliance pressures. This level of intentionality is what sets apart brands that grow globally and sustainably.
Protecting Peak Season Performance
Peak season is not the time to discover hidden tariff costs or compliance issues. With trade conditions changing quickly, brands that wait to adapt risk avoidable delays, margin loss, and customer frustration during their most important sales window.
Now's the time to act. Whether through in-country fulfillment, smarter cross-border tools, or a combination of both, brands that take steps today will be better positioned to navigate uncertainty and emerge ahead this holiday season.
This story was produced by Passport and reviewed and distributed by Stacker.
RELATED CONTENT: Here's How Trump's Tariffs Are Putting A Damper On Black Protective Hairstyles
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
13 minutes ago
- Yahoo
Why the market is shrugging off Trump's firing of the BLS chief
Trump fired the head of the BLS on Friday, but so far, markets have looked past the shock decision. Sources say there are a variety of other sources investors can use to assess the employment picture. Strong earnings and higher rate-cut odds are powering stocks higher on Monday. August kicked off with a shocker, with Donald Trump firing the head of the Bureau of Labor Statistics after a less-than-rosy July employment report. The move sparked prognostications about untrustworthy government data going forward and comparisons to China, which some believe is uninvestable due to issues with data quality. Then why is the market unfazed as trading kicks off on Monday? Stocks rallied to start the week, with the Dow up almost 500 points at midday and the Nasdaq Composite jumping as much as 2%. For now, markets are focused on other things, like the higher odds of a September rate cut after the employment picture suddenly soured. "Obviously, the firing was unconventional. That's pretty much everything with this administration compared to previous administrations, but at this point, there is so much private data that the market can look at other sources," Paul Hickey, cofounder of Bespoke Investment Group, told Business Insider. Apart from the BLS statistics that investors already parse, there's a patchwork of private and public data, including ADP data, hiring and firing data from a range of consulting firms, and labor market sentiment indicators from sources like the Conference Board. "There are private sources of data, and if they are moving in the opposite direction from the government data, then it becomes an indicator that something is off with the statistics,"Aleksandar Tomic, Associate Dean, Strategy, Innovation, & Technology at Boston College, told Business Insider. Trump said Erika McEntarfer's firing was justified and that the July data had been manipulated to make the administration look bad. He did not offer evidence for this claim, though White House economic advisor Kevin Hassett said the revisions in the data are "hard evidence." The July revisions were substantial, showing that the US added nearly 260,000 fewer jobs in May and June than had been initially reported. Trump and Republicans have also criticized earlier revisions, including last year's that showed over 800,000 fewer jobs added in the 12 months leading up to March 2024. The irony of Trump's anger over the July jobs numbers is that the weak report has pushed up the odds of the September rate cut to nearly 90%, getting the president closer to seeing the Fed loosen monetary policy as he's been demanding all year. But for investors, things like the robust GDP report for the second quarter and solid corporate earnings, particularly among mega-cap tech giants, are boosting the outlook for the market even as Trump's move stirs some uncertainty. For Sergio Altomare, a former senior enterprise architect at the Fed, the next big question is who will replace McEntarfer at the helm of the BLS. "I think the ultimate impact is going to take time to sort itself out, but I think really the immediate thing is, who gets appointed? What is their background? What does the data show? Is it dramatically different from what we're seeing?" Altomare said that it will be difficult to properly assess the impact of Trump's decision on financial markets until these questions have clear answers. Luckily for markets, some answers could come soon. Trump has said that in the coming days, he'll nominate a new BLS chief, as well as a replacement for Fed Gov. Adriana Kugler, who resigned on Friday. Both positions require confirmation by the Senate. It is also worth noting that some agree with the president's decision. For his part, investing legend Ray Dalio said on Monday that he, too, would probably fire the BLS chief. In a post on X, he described the agency's process for making key economic estimates as "obsolete and error-prone," with no plan to fix it. "The revisions brought the numbers toward private estimates that were in fact much better," Dalio said. Read the original article on Business Insider
Yahoo
13 minutes ago
- Yahoo
Here's What Key Metrics Tell Us About Agilon (AGL) Q2 Earnings
Agilon Health (AGL) reported $1.39 billion in revenue for the quarter ended June 2025, representing a year-over-year decline of 5.9%. EPS of -$0.25 for the same period compares to -$0.07 a year ago. The reported revenue represents a surprise of -4.98% over the Zacks Consensus Estimate of $1.47 billion. With the consensus EPS estimate being -$0.11, the EPS surprise was -127.27%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Agilon performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Avg. Medicare Advantage Members: 498,000 compared to the 493,100 average estimate based on two analysts. Revenues- Other operating: $2.94 million versus $3.16 million estimated by five analysts on average. Compared to the year-ago quarter, this number represents a -7.4% change. Revenues- Medical services: $1.39 billion compared to the $1.46 billion average estimate based on five analysts. The reported number represents a change of -5.9% year over year. View all Key Company Metrics for Agilon here>>> Shares of Agilon have returned -30% over the past month versus the Zacks S&P 500 composite's +0.6% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Agilon Health, Inc. (AGL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 minutes ago
- Yahoo
Japan trade negotiator to visit US to press for swift implementation of auto tariff deal
TOKYO (Reuters) -Japan's top tariff negotiator Ryosei Akazawa said he planned to visit Washington from Tuesday to press the United States to have President Donald Trump sign an executive order to bring an agreed 15% tariff rate on automobiles into effect. The U.S. last month agreed in a trade deal with Japan to lower existing tariffs on Japanese automobile imports to 15% from levies totaling 27.5% previously. Duties that were due to come into effect on other Japanese goods will also be cut to 15% from 25%. "We will push the United States to make sure that an executive order be signed on the agreed tariff on automobiles and automotive components as soon as possible," Akazawa told parliament. Referring to the problem of "stacking" where goods can be affected by multiple tariffs, Akazawa also said Japan wants to make sure that goods that are already levied at more than 15% would be exempt from the additional 15% rate.
