Cross‑Border E‑Commerce In 2025: Tariffs, Trade Wars, And Shifting Away From The United States

The year 2025 opened as a particularly challenging period for cross‑border e‑commerce. In January, U.S. President Donald Trump announced that TikTok must be sold or face removal from U.S. app stores, and in February the United States imposed a 10% tariff on Chinese goods citing the fentanyl issue, initiating months of tariff escalation between the two countries. By August, an executive order formally ended the duty exemption for small parcels valued at $800 or less, delivering a decisive blow to sellers focused on the U.S. market while sellers in Europe, Japan and other regions awaited potential policy changes. Domestic regulation tightened in parallel, with new tax‑reporting requirements for cross‑border platforms taking effect in June.

For many sellers, 2025 proved turbulent: regulatory pressure intensified even as tariff threats loomed. As successive shocks subsided, a new operating environment emerged. Some merchants adapted and seized opportunities, while others redirected efforts toward alternative markets, signaling the start of a new industry cycle.

The most immediate change for sellers was the end of the era of unchecked expansion. The tariff measures escalated rapidly: a 10% levy in January was followed by a 20% comprehensive tariff and a 34% retaliatory tariff in March, then additional increases in April that pushed certain tariffs as high as 145%. These abrupt cost increases rendered many U.S.‑focused business models unviable. The cancellation of the small‑parcel exemption compounded the impact, and several jurisdictions moved to follow suit. The European Union plans to impose duties and handling fees on low‑value parcels from 2026, while Japan and Thailand will remove exemptions for imports below 10,000 yen and 1,500 baht respectively beginning in 2026.

Domestic policy changes also raised operating costs. The State Taxation Administration’s new reporting rules require all domestic and overseas platforms serving Chinese sellers to submit seller tax information, increasing compliance burdens. Sellers reported that thin margins in low‑value categories such as apparel and toys—often 10%–20%—could be compressed below 5% after tax and compliance changes, forcing many to seek higher margins or risk being driven from the market. In response, merchants prioritized securing quality inventory and capturing traffic, while pursuing supply‑chain efficiencies, targeting markets where exemptions remain in place, and shifting toward higher‑value products.

At the same time, marketing and traffic acquisition costs rose. Teikametrics reported that Amazon’s cost‑per‑click increased from $0.73 in 2023 to $0.84 in 2024, a rise of about 15.1%, and TikTok’s CPM reached $6.21 by June 2025, up 12.28% year‑on‑year. These higher customer‑acquisition costs have prompted platforms to accelerate seller screening and to favor merchants with full‑chain operational capabilities and compliance awareness. According to Qichacha data, 13,400 related enterprises had registered by August 2025, exceeding the prior year’s total and intensifying competition.

Major platforms adjusted their strategies and tightened standards. Temu began testing on‑site advertising and revised traffic allocation while strengthening oversight of seller compliance, including stricter certification requirements for children’s products and updated labeling for shipments to the European Union. TikTok Shop raised the deposit requirement for U.S. cross‑border self‑operated sellers from $500 to $1,500 effective December 15, 2025. These measures signaled a clear shift away from the low‑price expansion model that had previously dominated the sector.

Platform operators also diversified their business models. Temu moved to recruit local U.S. sellers and expand semi‑managed offerings, with semi‑managed GMV accounting for more than 40% of its U.S. volume by the third quarter of 2024. TikTok Shop increased investment in warehousing and logistics while expanding into Europe and Southeast Asia to mitigate policy risk. AliExpress refocused on merchant efficiency and niche market penetration, offering full‑management services, AI‑driven advertising automation and subsidy programs to support emerging brands. Shein pursued brand upgrading and cultural integration, opening physical stores in France and launching sustainable apparel lines to reshape its global image. During the recent Black Friday period, Temu and Shein extended promotional campaigns, TikTok Shop coordinated simultaneous launches across multiple major markets, and AliExpress linked Singles’ Day with Black Friday for continuous promotions, reflecting a move toward more comprehensive, long‑term competitive strategies.

As platforms transition from price wars to sustained competition, seller capabilities have become more critical. In a softer global consumption environment, shoppers are more price‑sensitive and compare options across platforms, according to Amazon research. Successful merchants must therefore excel not only in product selection and pricing but also in logistics, advertising precision and customer service. This requires larger inventories, stronger cash reserves and more targeted marketing to withstand prolonged competitive cycles.

Localization and market diversification have emerged as strategic priorities. Platforms and sellers are building local supply chains and logistics networks to improve fulfillment, marketing and after‑sales service, and to reduce exposure to tariff shocks. Shein has planned local supply‑chain initiatives in Turkey and Brazil, and AliExpress has partnered with multiple overseas warehouse providers. Expansion into emerging markets such as Europe, Latin America and Southeast Asia has accelerated as platforms seek to spread risk.

Artificial intelligence is increasingly positioned as a growth enabler. Amazon introduced the AI shopping assistant Rufus to enhance conversion through conversational interaction, while leading cross‑border platforms rolled out AI marketing tools to support intelligent product selection and automated ad placement. Over time, platforms have converged in their offerings—providing full‑management, semi‑managed and self‑operation models, pursuing global market coverage and aligning seller‑support strategies—reflecting a maturation of the sector and a shift toward competition based on operational excellence.

The industry’s reconfiguration means that easy gains are no longer available. The decade‑long boom in Chinese cross‑border e‑commerce has given way to a more demanding environment in which only merchants with robust fundamentals, compliance capabilities and supply‑chain depth are likely to endure.