Ecommerce Fraud 101: How to Safeguard Your Business
The ecommerce sector has experienced a whirlwind of changes under the economic policies of former President Donald Trump, especially as we approach 2025. His approach to trade, tax cuts, and deregulation has had lasting effects on businesses, from large corporations to small startups.
These policies were designed to protect American interests, foster economic growth, and reduce trade imbalances.
However, for ecommerce, the implications have been complex, ranging from increasing operational costs to altering consumer behaviors.
Let’s go into the specifics of how Trump's economic strategies have impacted the ecommerce world, focusing on the most current developments that are shaping the market in 2025.
The Closure of the "De Minimis" Exemption: A Game Changer for Global Ecommerce
One of the most significant changes that Trump made in their trade policy is putting an end to the “De Minimis” exemption.
So what exactly was this exemption?
This exemption allowed international shipments worth $800 to enter American territory duty-free. Thus online retailers were able to offer affordable products to American consumers. However, starting in February 2025, this exemption was removed.
What does this mean for ecommerce stores?
For global ecommerce giants such as Temu, Shein, and Amazon, this exemption allowed them to ship products from international markets - especially from China - without incurring any significant tariffs. Now with the increase in tariffs, it would automatically mean that consumers would have to pay more for any product.
The immediate effect can be seen in the spike of operational costs. For smaller ecommerce players, who relied heavily on low cost shipping, this exemption would prove to be especially detrimental.
The increase in shipping costs could translate to a rise in product prices, which might discourage cost-sensitive consumers.
Impact on consumers?
They will likely see price hikes, especially for lower-cost goods. Popular fast-fashion retailers like Shein—which heavily depend on low-priced imports—will be forced to pass on the additional costs. As a result, shoppers might begin looking for more affordable alternatives within the U.S. market, or even consider purchasing fewer items.
Additionally, the removal of the exemption means that shoppers might experience longer delivery times due to the increased complexity of customs processing.
Tariffs and Trade Wars: The Price of Protectionism
Another crucial pillar of Trump's economic policies is his trade agenda, particularly his tariff initiatives aimed at China, Canada, and Mexico. These tariffs have been enforced in a bid to reduce the U.S. trade deficit and bring jobs back to American soil.
What exactly are the new tariffs in 2025?
As of February 2025, Trump’s administration imposed a 10% tariff on all Chinese imports, along with a 25% tariff on products imported from Canada and Mexico. This is part of a broader strategy to challenge trade imbalances and encourage domestic production.
While these tariffs are aimed at protecting American industries, they have a profound effect on businesses involved in global trade, especially those in ecommerce.
These tariffs have particularly affected big ecommerce stores like Amazon, Walmart, and eBay since they depend on items imported from these nations. Customers now will have to pay higher costs as a result of retailers having to pay more for goods.
In many cases, ecommerce businesses must decide whether to absorb these additional costs, passing them onto the consumers, or find ways to absorb them without affecting the bottom line.
The new tariffs have also triggered retaliatory measures from China, Canada, and Mexico. For example, China has announced tariffs on U.S. goods, further complicating the global supply chain. These reciprocal tariffs have created a tense environment for ecommerce companies that rely on smooth international trade.
Tax Cuts and Their Impact on Ecommerce Giants
One of Trump’s major economic initiatives was the Tax Cuts and Jobs Act of 2017, which slashed the corporate tax rate from 35% to 21%. This move was intended to incentivize business expansion and job creation by providing companies with more capital to reinvest in their operations.
The tax changes had a major positive impact on larger ecommerce companies like Apple and Amazon. For example, Amazon expanded its cloud division and logistics network by reinvesting its tax savings in its infrastructure (AWS). These businesses were able to grow quickly as a result, increasing their competitiveness in both domestic and foreign markets.
For smaller ecommerce businesses, however, the tax cuts did not have the same impact. Many of these businesses did not see substantial benefits from the tax reductions, and they often struggled to reinvest the savings into growth initiatives.
While larger companies have flourished, small online retailers are still grappling with rising costs, competition from giants like Amazon, and changing consumer expectations.
The Deregulation Agenda: Opportunities and Challenges
Trump’s economic philosophy also emphasized deregulation, aiming to reduce the regulatory burden on businesses, including those in the ecommerce space. The idea was that fewer restrictions would allow businesses to innovate and operate more freely.
However, this approach has had mixed results in the ecommerce world.
Ecommerce companies benefited from fewer restrictions around advertising, product pricing, and international trade. For instance, influencer marketing and other modern advertising strategies saw fewer regulatory hurdles, giving ecommerce platforms more freedom to engage with customers creatively.
However, deregulation also led to some risks. For example, ecommerce platforms faced challenges related to data privacy, cybersecurity, and consumer protection, as fewer regulations meant that companies had more latitude to handle user data and marketing strategies in ways that may not always be in the best interests of consumers.
As a result, while businesses enjoyed a less restrictive environment, consumer trust became a central concern. In the absence of regulations to protect personal data, ecommerce businesses had to rethink their approach to transparency and data protection.
The Shift Toward Domestic Sourcing and the "Made in America" Trend
As tariffs increased on foreign goods, there was a noticeable shift in consumer behavior. Many ecommerce businesses began to focus more on domestic production, and consumers began to favor products labeled “Made in America.”
This shift was particularly pronounced in industries like fashion, beauty, and consumer electronics.
Many ecommerce platforms, like Etsy and Walmart, doubled down on promoting products from local sellers and manufacturers. This gave smaller businesses an opportunity to thrive and capture the “Made in America” sentiment that gained momentum during the Trump administration.
These platforms helped American manufacturers tap into global ecommerce demand, offering consumers an alternative to overseas products.
To Wrap Up
As we look towards 2025 and beyond where the economy continues to evolve, ecommerce companies must stay agile, exploring new ways to meet consumer demands while managing the regulatory and trade challenges that continue to shape the market.
Whether you're a large corporation or a small startup, the ability to adapt and innovate will determine your success in this new era of ecommerce.
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