Small e-commerce businesses sourcing apparel and materials face a harsh reality: while global online retail is projected to reach $6.4 trillion in 2025, US-China trade tensions are driving logistics costs up by 20 to 50 percent. Small and medium-sized businesses, who make up more than 60% of third-party sellers on sites like Amazon, lack the clout to cover these expenses in contrast to retail behemoths with diverse supply chains.
While shipment volumes on US-China e-commerce routes have decreased by 65 percent, over half of small enterprises report greater expenditures as a result of tariffs. This results in declining profitability, price inflation, and inventory problems for clothing retailers who rely on Chinese textiles.
After 15 years managing logistics between China and the US, I’ve learned one lesson: waiting for trade policy to stabilize is futile. The businesses surviving today are those making hard decisions now—about sourcing, shipping, and paying for reliability.
Why This Hurts More Than Before
US-China trade tensions aren’t just another tariff skirmish. Import costs have jumped since April 2025, and economists warn trade between distant partners could shrink nearly 6 percent annually if fragmentation persists. Textiles and apparel are particularly vulnerable—45 percent of global trade in these sectors faces direct risk.
The difference this time is the chain reaction. Years-old supply lines are being relocated via Vietnam or Mexico, which will increase expenses and cause delays. A significant benefit for small importers was lost when the de minimis exemption for goods under $800 was eliminated. Port congestion from everyone using the same detours creates further delays that can wipe out an entire season’s sales.
Large retailers can absorb these shocks through scale. When you ship thousands of containers a month, you can negotiate rates small sellers simply can’t match. The cost gap between Amazon and a business shipping 50 containers a month has nearly doubled in two years.
The Real Costs Go Beyond Tariffs
Chinese fabrics now face tariffs up to 60 percent, but that’s only the start. Rerouting through intermediary countries adds 10–20% to transit time. Ports like Los Angeles are clogged with pre-tariff inventory rushes, causing multiweek bottlenecks.
For small sellers making around $50,000 in monthly revenue with 5–10 percent margins, a 25 percent increase in landed costs—tariffs, rerouting, and compliance—can erase profitability. Miss a delivery window by three weeks, and it’s not just storage fees—it’s markdowns or write-offs for off-season stock.
E-commerce exports from China to the US have already decreased by 65 percent. Small vendors are forced to choose between raising prices and losing clients, absorbing the expenses (killing margins), or purchasing more inventory prior to tariff rises (tying up capital). None of these are long-term viable.
What’s Actually Working
The most resilient businesses aren’t reinventing the wheel—they’re being more strategic. Some are nearshoring production to Mexico or allied countries, cutting costs by 15–25 percent compared with China. The key is to move selectively: identify products worth relocating based on volume and margins, test new suppliers with small orders, and understand that true diversification takes 18–24 months.
Others are partnering with Chinese manufacturers to establish facilities in Mexico or the US. It’s expensive upfront but avoids tariffs while preserving long-term supplier relationships.
Digital tools help in practical ways—not with flashy AI, but through real-time rate comparisons, automated customs forms, and shipment tracking. Through partnerships with outside logistics companies, small businesses may receive volume-based pricing and knowledge that they would not be able to obtain on their own.
Building resilience is also crucial, and this includes retaining financial reserves to manage the cash flow burden of diversification, maintaining safety stock for essential commodities, and dynamic pricing that adapts to tariffs.
How to Start
Begin with an honest assessment. Map your suppliers, calculate tariff exposure, and identify low-margin products. Then explore alternatives—issue requests for proposals to suppliers in Mexico, Vietnam, or other viable regions.
Test before committing fully. Observe the actual landing cost, including any hidden costs and delays, and move 20–30 percent of manufacturing to alternative arrangements. Maintain financial reserves and build relationships with several vendors. Keep yourself updated on policy changes since early information may be obtained via trade associations and customs brokers.
What’s Coming
These tensions aren’t temporary—they signal a structural shift in global commerce. For small e-commerce businesses sourcing apparel and materials, the question isn’t whether to adapt but how fast.
The companies that will thrive in 2026 are those making tough calls today, building supply chains that can withstand uncertainty. Because when your shipment is stuck at a congested port or caught in a tariff dispute, nothing else matters—only the cargo.
Vitalii Savryha is the founder of Ardi Group of Companies and a Stanford alumnus with 15 years of experience optimizing US-China supply chains for e-commerce businesses.
