Trump's 2018 tariffs caused companies to reroute trade and boost prices
April 22, 2025
Key takeaways:
- Historical figures suggest that tariffs aren’t helpful to U.S. Amazon sellers and e-commerce merchants elsewhere, despite China’s dominance on the platforms.
- Chinese sellers have overtaken Americans as the majority of top-performingsellers on Amazon and have made big gains on Walmart Marketplace.
- Chinese e-commerce merchants have advantages that American sellers don’t and they will likely hikeprices to make up for the tariffs.
President Trump’s tariffs aim toboost American businesses, but if history is the judge, they won’t be helpful to the country’s Amazon sellers.
“Despite promises that tariffs will help American businesses, historical evidence shows they simply make products more expensive for American consumers while failing to shift market share to domestic sellers,” said Ben Donovan, analyst at e-commerce consultancy Marketplace Pulse, in a blog post.
Donovan pointed to a 2019 studyin the Journal of Economic Perspectives, which found that when the first Trump administration placed tariffs on $283 billion of imports, the costs were “almost completely passed through into U.S. domestic prices.”
The study also saidthat 2018 tariffs caused companies to reroute around $165 billion in trade a year throughworkarounds, such as shipping through other countries.
“These supply chains were reconfigured rather than repatriated while the underlying marketplace dynamics continued to evolve in favor of Chinese sellers,” Donovansaid.
The study came years before the dominance of Chinese merchants on U.S. e-commerce platforms.
Chinese sellers overtook Americans on Amazon in 2024, accounting for more than half of top 10,000 sellers by revenue, according to Marketplace Pulse.
On WalmartMarketplace, Chinese sellers now account for around 28% of active merchants, up from less than 1% at the start of 2021, Marketplace Pulse said.
Donovan said that Chinese sellers have advantages that tariffs won’t fix.
“Many are either manufacturers themselves or have a closer proximity to manufacturing than American businesses,” he said.”They benefit from Chinese government support through export subsidies and tax rebates.”
“And theyve become increasingly sophisticated in marketplace operations through years of platform experience,” he added.
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