The Hidden Ripple: How US Tariffs Affect Not Just Sellers, But Their Suppliers

“For makers, Tariff D-Day hits both sides of the workbench: producing costs more, and selling is more complicated.”

When the United States scrapped its de minimis threshold on imports under $800, much of the conversation focused on how sellers would be affected. Parcels that once entered duty-free are now subject to flat fees or ad valorem duties, making international shipping more expensive and less predictable.

The Hidden Ripple: How Tariffs Affect Not Just Sellers, But Their Suppliers

But there’s a second, quieter ripple effect that’s just as damaging: suppliers are caught in the same storm. For artisans and small businesses who rely on imported materials, the tariffs don’t just hit at the point of sale — they strike at the very foundation of making.

The Double Squeeze: Producing and Selling

Producing Costs More

Most independent makers don’t source all their materials locally.

• A jeweller might order a silver chain from Italy, gemstones from India, or specialist tools from the U.S.

• A textile artist might buy organic cotton from Turkey or hand-dyed fabric from Japan.

• A ceramicist may depend on glazes or kilns made abroad.

Each of these supply lines now risks higher duties, shipping delays, and extra paperwork. What used to be a straightforward order from a trusted supplier has become a calculation: Can I absorb this extra cost, or will I have to raise my prices?

Selling Is More Complicated

On the other side of the bench, finished goods shipped to U.S. customers face the same hurdles. A £30 handmade mug may now attract an $80 duty fee — or, if lucky, a 10% ad valorem charge. Either way, the end price to the customer climbs, making international sales harder to justify.

The result is a painful squeeze: materials cost more to buy, and finished items are harder to sell.

Suppliers Under Pressure

It’s not only artisans feeling the strain. Suppliers themselves, especially small-scale producers of specialist materials, are facing the same obstacles when shipping to their customers. Their costs rise, their delivery times lengthen, and their own buyers grow frustrated.

This creates a chain reaction:

• Delays at the supplier level slow down the maker’s production.

• Rising material costs erode already thin margins.

• By the time the finished product reaches a U.S. buyer, it’s priced higher than many are willing to pay.

In effect, the tariffs are amplified at every step of the supply chain, leaving less room for creativity and more room for compromise.

Why Returns Make It Worse

As if higher costs weren’t enough, returns add another layer of complexity. Under the new rules:

• Returned items may incur additional duties when re-entering the country of origin.

• For makers working with small-batch, unique pieces, the financial risk of a return can outweigh the value of the item itself.

• Cross-border return rates are lower (around 5–10%), but even a handful of returns can wipe out profits when duplicate duties and shipping costs are involved.

How common are returns?

• Across U.S. retail, approximately 16.5% of purchases are returned.

• In e-commerce, this figure rises to 20–30%, particularly in the fashion and apparel sectors.

• But for cross-border purchases, return rates average just 5–10%.

• For handmade and considered items, the typical rate is 5–8%.

That may sound small, but under Tariff D-Day, even a handful of returns can cause outsized problems. A few parcels sent back with duplicate duties or customs delays can wipe out weeks of profit — and sour customer relationships at the same time.

Should Sellers Ignore the U.S. Market for Now?

It’s a fair question. With all the uncertainty, would sellers be better off focusing closer to home?

Reasons to Pause

• High risk, low predictability: Postal suspensions, unclear customs processing, and unpredictable fees make it hard to guarantee delivery.

• Customer frustration: Buyers often blame the seller, even when duties or delays are outside your control.

• Margin erosion: Higher shipping and duties may push prices beyond what U.S. buyers are willing to pay.

• Return headaches: The cost of managing even a small percentage of returns could outweigh the revenue gained.

Why a Toehold Still Matters

• U.S. buyers are loyal: Etsy’s U.S. audience accounts for more than 40% of marketplace spend.

• FBA and 3PL solutions: Bulk shipments into the U.S. bypass parcel-by-parcel duties, simplifying delivery.

• DDP shipping: More expensive, but it prevents unexpected fees and maintains your reputation.

What About U.S. Makers?

They may benefit from easier domestic sales, but many also rely on imported supplies. Their production costs are rising, even if they don’t face the same export challenges. So while they have a home advantage with local buyers, they’re also squeezed on the materials side.

Strategic Takeaway

If you’re a small-scale business with limited bandwidth, it may be wiser to focus on your local or regional market for now, where you can ship reliably and maintain customer trust.

But if you can manage the complexity, consider testing one controlled U.S. channel:

• Offer DDP-only shipping.

• Trial a small wholesale partnership with one U.S. retailer.

• Explore FBA or 3PL fulfilment for a handful of bestsellers.

Think of it less as “ignore the U.S.” and more as “don’t let it destabilise your business.”

Who Gains From the Ripple?

While makers and suppliers struggle, others are well-positioned to benefit:

• U.S. manufacturers are poised to gain ground as imported materials and goods become more expensive.

• DDP-capable carriers (such as UPS and FedEx) will capture sellers who are forced to move away from traditional postal services.

• Customs tech platforms that automate tariff codes and landed-cost calculations will become essential.

• Wholesalers and 3PLs offering consolidation and bulk imports will attract more small sellers looking for relief.

US Tariffs: Final Word

Tariff D-Day was intended to curb cheap mass imports. However, for artisans and small businesses, it has created a ripple effect that extends from the supplier to the customer.

Producing now costs more, and selling is more complicated. Returns are trickier, shipping is riskier, and the U.S. market is harder to reach.

Still, the lesson isn’t to give up — it’s to adapt. That might mean focusing on home markets, consolidating shipments, or reevaluating sourcing strategies. Those who build resilience into both supply and sales will be the ones who thrive, even when the rules change overnight.