Analysts at the Bank of America said tariffs have raised prices for consumers.
They wrote in a note that consumers have covered about 50% to 70% of the cost of levies to date.
This suggests tariffs will continue to put “upward pressure” on inflation, they said.
I own an e-commerce business. We are an American company. We make and ship goods directly from China.
Our margins are tight, basically we cannot sell in the USA for a lower price. Our suppliers can give a tiny bit of margin back to us, but same story for them too.
So we have 2 options:
A. Stop selling in the US
B. Add a tariff charge, so that if people still want to buy, they can.
We chose option B, direct passthrough of the tariff cost. About 60% still pay, and we lost the rest of our customers.
I don’t know where else they shop, because our competition did the same, but I assume they decided not to buy anything given the higher cost.
i assume you cant sell it to EU customers?
Yes we can. That side of the business is growing.
I think a lot of other e-commerce businesses have also shifted away from the US market as well. So US buyers have fewer choices now.
I’ve searched quite a lot and cannot find factories in the US for the kind of goods we sell. I’m sure we could pay somebody considerably more who would do it but then we would have no customers.
They probably can’t afford it.
Exactly. There’s no demand when the price increases so much.