Amazon Tariffs: What the New De Minimis Rules Mean to Sellers

Recent trade policy changes are reshaping the landscape for Amazon sellers, with new tariffs and de minimis rules impacting costs, compliance requirements, and competitive dynamics. Here’s what third-party (3P) and first-party (1P) sellers need to know—and do—to maintain profitability in 2025.

Key Amazon Tariffs Changes Impacting Sellers

The US has implemented three major trade policy updates that could directly affect Amazon sellers importing from China, Canada and Mexico or leveraging the de minimus rule. These changes influence sourcing strategies, pricing, and supply chain efficiency.

1. De Minimis Rule Overhaul: Section 201/232/301 Goods Now Face Duties

The US Customs and Border Protection (CBP) has revised de minimis rules, removing duty-free exemptions for products under:

• Section 201, which aims to protect American industries from injury caused by increased imports.
• Section 232, which is designed to restrict steel and aluminum imports for national security.
• Section 301, which aims to combat unfair trade practices, focuses on Chinese imports. Implemented in phases, they impact over $200 billion in goods.

Simply put, goods like steel, aluminum, solar panels, and washing machines now incur tariffs, regardless of their shipment value.

Impact on Sellers

• Amazon sellers importing small-value shipments of affected goods now face unexpected costs, increasing their overall expenses.
• Higher tariffs on select steel and aluminum products can increase manufacturing costs for private-label sellers, making production in China or other affected countries less competitive. Those products subject to Section 232 are available on the U.S. Customs and Border Protection FAQ page, though it may not yet be updated. Product exclusion codes are up-to-date as of Feb. 6th.
• Sellers relying on low-cost international suppliers may need to reconsider sourcing strategies, shifting towards US-based or tariff-exempt regions.

For instance, a seller specializing in stainless steel kitchenware could previously avoid tariffs by shipping in small batches under $800 (Section 321 De Minimis). Now, every shipment incurs duties, cutting into margins and potentially forcing price increases or supplier changes.

2. 10% Tariff Reinstatement on $300B of Chinese Imports & De Minimis Suspension for Chinese Goods

A February 2025 executive order reinstated 10% tariffs on $300B of certain Chinese imports while suspending de minimis eligibility for Chinese goods entirely. This directly impacts sellers using platforms like Temu and Shein, as well as Amazon sellers relying on small, frequent shipments from China.

It is advisable for sellers to consult an imports expert to learn more about which products may be subject to this increase. Review the strategies section below to learn more about this. 

Impact on Sellers

• Private-label brands and dropshippers relying on Chinese suppliers (e.g., Temu, Shein) now face higher costs. This could drive up product prices or force sellers to absorb the extra expense.
• Small inventory shipments from China (e.g., just-in-time logistics) are now taxed, disrupting cash flow and increasing upfront capital requirements.
• More sellers may shift sourcing to the U.S. or countries like Vietnam or India to bypass these tariffs, though this transition will take time and effort.

3. Tariff Postponement on Canadian & Mexican Auto Parts and Agricultural Goods, But Stricter Regulations

While the proposed 25% tariffs on Canadian and Mexican auto parts and agricultural goods are postponed until July 2025, new trade regulations introduce additional complexity, including new 10-digit Harmonized Tariff Schedule (HTS) code requirements.

Impact on Sellers

• Longer customs clearance times could lead to supply chain delays, especially for perishable or time-sensitive goods.
• Sellers in categories like automotive parts, supplements, and food may face additional compliance costs, paperwork, and audits.
• HTS code changes require more precise product classification, increasing the risk of misclassification penalties or shipment rejections.

Financial Impact of Trump Tariffs Amazon Sellers 2025

‍New tariffs on Chinese imports, combined with the elimination of de minimis benefits, are changing the cost structures for both 3P sellers and 1P vendors. Given that about 25% of Amazon’s own products (first-party merchandise) come from China–a higher exposure than any other major ecommerce platform–these changes could have a massive financial impact. Additionally, Amazon’s 10,000 largest 3P sellers include almost 50% China-based businesses, according to Marketplace Pulse, meaning a massive portion of the marketplace is affected.

For 3P Sellers: Rising Amazon FBA Tariff Costs & Tougher Logistics

‍Many 3P sellers, especially those reliant on China-based suppliers, now face increases in costs due to the removal of de minimis exemptions. Let’s break it down:

‍Before Tariffs: A seller importing a $600 shipment of Bluetooth earphones from China could previously avoid duties under the $800 de minimis threshold.

After Section 301 tariffs Amazon:

That same shipment now incurs:

• 10% General Tariff: $60
• 7.5% Section 301 Tariff: $45
• Total New Cost: +$105 per shipment

For 1P Vendors: Shrinking Margins & Contract Pressure

‍Amazon 1P vendors, who supply goods directly to Amazon under contract, face even greater financial strain because Amazon often forces them to absorb tariff-related costs.

Key Data from Morgan Stanley

• 25% of Amazon’s 1P inventory comes from China.
• 1P products make up nearly half of all Amazon sales, while the rest are sold by 3P sellers on Amazon’s marketplace.
• Compared to other ecommerce players, Amazon has the highest tariff exposure:
  
  • Amazon (25%) vs. Industry Average (~10%)
  • Revolve (22%), eBay (11%), Etsy (3%), Peloton (3%), Figs (0%)

Margin Squeeze for Vendors

• A vendor supplying $1M in Chinese goods now faces:
  
  • 10% tariff increase → $100K in new costs
  • No ability to pass this cost to Amazon without renegotiating contracts
• Many vendors must either eat the costs or risk damaging their Amazon partnership by demanding price hikes.

Amazon Seller Compliance 2025: Challenges and Risks

The new regulatory environment creates several operational hurdles:

1. HTS Code Accuracy: The shift to mandatory 10-digit HTS codes increases complexity. Misclassification can result in a fine on product value.
2. Forced Labor Compliance: CBP is intensifying scrutiny of supply chains, particularly for Chinese goods. Failure to comply with customs regulations can lead to hefty fines, with penalties reaching $10,000 for negligence and escalating to $100,000 for intentional violations.
3. Customs Delays: Enhanced entry requirements are extending clearance times, leading to increased storage fees for FBA sellers and potential inventory stockouts.

Strategies to Avoid Amazon Tariffs 2025

1. Review Tariff Classifications with an Imports Expert

Tariffs can vary greatly depending on product classification, so reviewing and optimizing tariff codes could unlock potential cost savings. Suppliers may assign incorrect HTS codes, causing misclassification and leading to inflated tariff charges or penalties.

• Consult an Import Expert: Just as accountants optimize tax deductions, import specialists can help legally reclassify products for lower tariff rates. Honu Worldwide offers a free product audit to discover potential reclassification.
• Evaluate Sourcing Materials: Different raw materials, such as metals and woods, have varying tariff rates—adjusting materials could reduce costs.
• Assess Country of Origin: Changing the country of manufacture may provide opportunities for lower tariffs and improved profit margins.

2. Diversify Supply Chains

‍Relying solely on Chinese manufacturing is now riskier than ever. With the suspension of the de minimis exemption and new tariffs adding 10-25% to landed costs, sellers must explore alternative sourcing strategies.

• Shift Production to Other Countries: Consider shifting 30-50% of production to alternative markets like Vietnam or India.
• Leverage SPS Commerce: The SPS Retail Network provides access to vetted US manufacturers, to streamline your supply chain operations.
• Inventory Buffering: Stockpiling best sellers before tariffs take effect can create a competitive pricing advantage.

3. Optimize Fulfillment Strategy

• Try Seller Fulfilled Prime (SFP): Bypassing FBA check-in delays with SFP may lead to faster shipping times and higher Buy Box win rates.
• Use Amazon Warehousing & Distribution (AWD): AWD provides discounted bulk storage rates, reducing per-unit storage costs for high-volume sellers.‍
• Bulk Shipments to Cut Freight Costs: Consolidating small shipments into bulk orders may result in a substantial per-unit savings on shipping.

4. Hedge Against Tariff Volatility with Adaptive Pricing

Tariffs can shift unexpectedly based on trade negotiations, making flexible pricing essential.

• Dynamic Pricing Models: Adjust pricing based on real-time tariff updates and competitor pricing.
• Tiered Bundling Strategies: Offer bulk discounts to offset higher unit costs while increasing average order value. 

5. Automate Compliance

‍With customs enforcement tightening, compliance mistakes can lead to severe penalties—up to $100,000 for willful violations. Investing in automation is essential.

• AI-Driven HTS Classification Tools: Use platforms that provide highly accurate tariff classifications to prevent mislabeling penalties.
• ISO-Certified Supplier Audits: Ensuring suppliers comply with forced labor regulations protects sellers from import bans and disruptions.‍
• Trade Policy Monitoring: Businesses tracking trade negotiations and tariff exemptions proactively can adjust pricing and sourcing strategies.

Action Steps for Q2 2025

1. Conduct Cost Analysis: Use Amazon's FBA Revenue Calculator to model your new landed costs with updated duty rates.
2. Renegotiate Supplier Terms: Push Chinese suppliers for CIF (Cost, Insurance, Freight) terms to limit your tariff liability.‍
3. Apply for Amazon Incentives: Take advantage of new 2025 ASIN fee waivers available for new-to-platform products.