If your small business relies on importing goods from China whether it’s apparel, electronics, packaging materials, or everyday items like backpacks the rising cost of tariffs could be quietly eating away at your profits.
Although recent trade talks have paused some of the steepest tariffs, many importers are still feeling the heat. That’s because of “tariff stacking,” a situation where multiple layers of import taxes combine to raise costs far beyond the expected 30%. In some cases, the total tariff burden now ranges between 40% and 70%.
For example, a simple item like a child’s backpack or a women’s sneaker could be hit with combined tariffs of 40% or more. Products like cotton sweaters, bathing suits, and baby clothing are also being affected costing businesses significantly more than before.
Retailers like Walmart have already signaled that price increases are on the horizon. And while big corporations can often absorb or spread out those costs, small business owners are left making tough decisions. Some entrepreneurs are cutting product lines, scaling back production, or switching suppliers altogether. Others are facing higher interest rates on credit and loans, which makes placing large inventory orders months in advance even riskier.
Even small packaging choices are being reconsidered. One business owner who used custom tins for her spice company decided to stop using them altogether due to high costs and unpredictable shipping delays. What’s worse is the uncertainty. With little advance notice about when tariffs might rise or fall again, many small businesses are struggling to plan ahead or price products confidently. The lack of predictability makes it difficult to manage cash flow, forecast expenses, or invest in growth.
If your business is feeling the squeeze, now might be the time to:
- Reevaluate your supply chain
- Explore alternative sourcing options outside of China
- Re-negotiate pricing with suppliers
- Review your pricing strategy to factor in added costs
- Be transparent with customers about rising prices
Tariff stacking isn’t just a policy issue it’s a practical challenge for day-to-day operations. Staying informed and proactive will help you weather this season of uncertainty and protect your margins in the long run.
