New Economic Realities   //   May 13, 2025

US-China tariff deal offers brands ‘temporary relief,’ but long-term planning is still a challenge

For the past month, e-commerce executives have moved as quickly as they can to pause orders, contact alternative suppliers and find other ways to cut costs in the face of 145% tariffs on imports from China. 

Then, on Monday, the e-commerce industry got a bit of good news: For the next 90 days, tariffs on China would only be 30%, as the U.S. and China seek to develop a more permanent trading framework

To be sure, a 30% tariff is still a tough number for many companies to swallow. But the consensus among the half-dozen brand executives who spoke with Modern Retail is that a 145% tariff would have meant near-certain death for small businesses. But a 30% tariff — that, they can work with. 

“The initial reaction was definitely a little bit of a sigh of temporary relief that we, our business, can find a way to operate,” said Michael Wieder, co-founder and president of baby and toddler brand Lalo. 

“It’s a huge temporary relief, but the uncertainty continues to make it really hard to plan and make long-term decisions,” said Cassie Abel, founder and CEO of women’s technical apparel brand Wild Rye. “We’ll rush to get as much product through as possible, but we have some products that won’t make it through [customs and border protection] ahead of the 90-day pause.”

“We are cautiously optimistic,” Jimmy Zollo, co-founder and CEO of adaptive clothing brand Joe & Bella, said. But, he said that since the 145% tariffs on China took effect on April 9, it’s been difficult for him to plan for the future – to figure out, say, how much money he has to dedicate to his performance marketing budget and how much wiggle room he has to hire. “Those things are still very much in doubt.” 

After months of tariffs-on, tariffs-on posturing from President Donald Trump’s administration, the brand executives who spoke with Modern Retail said that, by and large, a 90-day reprieve from 145% tariffs isn’t enough. Given how slowly it takes inventory to move from a factory to a person’s doorstep — some of the brands interviewed for this article say they are due to place inventory orders for the holidays in just a couple of weeks — the current tariff plan doesn’t give them much clarity when planning for the rest of the year.

They don’t know how big their holiday orders should be, as they don’t want to risk getting slapped with an even bigger tariff once the 90-day truce is up. Many brand executives are also still unsure about whether or not to move manufacturing out of China altogether, as, on July 7, the 90-day reprieve on “Liberation Day” tariffs that was granted to all countries except China will be up. At that point, unless a deal is struck, factories in Vietnam will face a 56% tariff, while factories in Cambodia will face a 48% tariff. 

What’s more, while some of the brand executives interviewed for this article have looked at moving their manufacturing out of China, they say that there’s little to no supply chain that exists for their respective industries in other countries. 

“It’s just not possible in our category,” Zollo said. As just one example, many of the shirts that his adaptive clothing brand sells contain a special magnet that is encased in plastic that allows someone with limited dexterity to easily put on a shirt with one hand. That type of magnet, Zollo said, is only manufactured in China. So, even if his company, Joe & Bella, were able to find a manufacturer in Vietnam that would work with it, that manufacturer would have to import those magnets from China.

Others were a bit more successful in finding alternative manufacturing partners — but it will still take months to set up new lines of manufacturing. Matthew Hassett, the founder and CEO of Loftie, said his company is in the process of setting up a backup factory in Thailand, “but I don’t know that the government is not going to go after Thailand in 90 days, either.” For the next 90 days, he said, he’ll be focused on “just making as many backup plans as [he] can and trying to keep [his] options open.” 

Now, many companies also have to re-do the math on their margins – and the 30% tariff may not result in that much of a lower price for consumers. Loftie, which sells digital clocks, lamps and other accessories to help people sleep better, ended up raising the price on its lamp from $275 to $450 at the beginning of May. The lamp is manufactured in China, but it wasn’t just tariffs that caused the price to increase, Hassett said — it was also the fact that the de minimis exemption was revoked. 

Now, with a 30% tariff on China imports — though Hassett says his lamps face more like a 60% tariff when taking into account tariffs from the first Trump administration that are still in effect — Hassett says his company will lower the price of the lamp to $375 — still much higher than at the beginning of the year. And even then, he said he will caution consumers that it’s a temporary price hike, because he doesn’t know what will happen in 90 days.

Still, brands have a little more time to consider, in the long term, how to set up their businesses to ensure they will survive the new tariff regime. Greg Shugar, the owner of Beau Ties of Vermont, said he will probably use the 90 days to rush in some basics, like silk jacquard in neutral colors like black, that he imports from China. 

Wieder said his company is still pushing for an exemption on baby products, similar to the one granted during the first Trump administration, and is hosting an “Ask Me Anything” session with his brand’s customers on Tuesday to discuss how tariffs could impact costs for new parents. He said his brand is also working closely with an import lawyer because, while people in the industry are “catching wind” of businesses trying to skirt various tariffs, “we’re making sure everything we’re doing is above board.”

Zollo, meanwhile, is still trying to figure out what to do about holiday inventory, which he needs to place in about two weeks. And even after Monday’s announcement, he’s still not sure how big of a P.O. to place. 

“It’s a really hard decision,” he said. He’s worried that — by the time his inventory gets to the U.S. — the U.S.-China tariff policy could look different, and he could get slapped with even more tariffs. He also doesn’t know what consumer sentiment will be like this holiday season. 

“I want to hear a little bit more from the administration, both from the U.S., as well as from their counterparts in China, to feel a bit more comfortable that what’s in place now will be in place past this 90-day pause,” he said.

Julia Waldow contributed reporting