The Impact of Trump’s Reelection on eCommerce: What to Expect?

In the early hours of November 6th, Donald Trump declared victory in the 2024 U.S. presidential election. With the reemergence of his administration, businesses across the globe—particularly those involved in cross-border ecommerce—are bracing for potential shifts in trade dynamics.

Trump’s return has elicited mixed reactions. While some anticipate opportunities for local U.S. businesses, others fear heightened challenges in international trade. Here’s a look at what his reelection might mean for cross-border ecommerce.

Focus on “America First”: Local eCommerce to Gain

Throughout his political career, Trump has emphasized “America First,” a policy framework designed to prioritize domestic enterprises. This philosophy could bolster local ecommerce platforms and U.S.-based sellers. For cross-border sellers, however, this could mean a tougher competitive environment. Those relying heavily on exports to the U.S. may face new hurdles, including stricter localization requirements and greater emphasis on local fulfillment services.

Tariff Increases and Rising Product Costs

One of the most talked-about aspects of Trump’s trade policy is his love for tariffs, famously referring to them as “the most beautiful word in the dictionary.” Under his leadership, tariffs on imports—especially from countries like China—are expected to rise significantly. These tariffs range from a global 10% minimum tariff all the way up to 60% for imports from China.

This poses a challenge for cross-border ecommerce sellers, many of whom are importing from China (and elsewhere). With increased tariffs, sellers may struggle to keep prices competitive, especially for goods subject to “punitive tariffs”.  While long term this will probably result in prices going up across the board, short term it will likely mean decreased margins.

Rising Logistics Costs and Supply Chain Challenges

The anticipation of increased tariffs often prompts sellers to rush shipments, leading to a surge in demand for logistics services. This could cause short-term spikes in shipping and storage costs. Additionally, stricter customs inspections, potential port congestion, and revised transportation policies may result in delays and increased risks in international shipping.

Cross-border sellers might need to reevaluate their supply chains, exploring alternative routes or methods to minimize costs and risks associated with these logistical challenges.

Currency Fluctuations and Profit Margins

Trump's policies could also influence the value of the U.S. dollar. If his administration pursues policies to devalue the dollar to support domestic manufacturing and reduce trade deficits, cross-border sellers might see reduced profits from U.S. sales due to unfavorable exchange rates.

However, a weaker dollar could potentially boost U.S. consumer spending, offering sellers higher sales volumes to counterbalance slimmer margins. That said, inflationary pressures remain a risk if rate cuts are not carefully managed.

Amazon's Monopoly Scrutiny May Not Go Away

It's highly likely that in January Trump will replace Lina Khan as head of the Federal Trade Commission (FTC), which enforces the U.S.’s antitrust laws. The FTC sued Amazon in 2023 for illegally maintaining its monopoly. However, Big Tech companies hate her and Elon Musk has called for her firing. 

So does that mean the anti-trust case against Amazon will halt? Well, not necessarily. Trump tussled with Amazon during his first term (Amazon accused Trump of costing them a $10 billion defense contract for cloud computing) and Trump isn't exactly a lover of Jeff Bezos (nor the Bezos-owned Washington Post). In fact, Trump has been on record numerous times as describing Amazon as having a monopoly.

So will Trump's presidency affect the FTC investigation into Amazon? It seems unlikely.

Potential Relief for TikTok and Similar Platforms

Unlike his earlier term, Trump’s stance on platforms like TikTok has softened. He recently expressed support for the app, signaling that a ban is unlikely. This is good news for ecommerce businesses leveraging TikTok for marketing and sales, as the platform continues to grow as a vital tool for engaging with U.S. consumers.

Supply Chain Diversification: The Shift Away from China

To mitigate tariff impacts, many businesses are already exploring supply chain diversification. Regions such as Southeast Asia, Latin America, and particularly Mexico, have become attractive alternatives for manufacturing. Mexico, due to its proximity and favorable trade agreements, is a standout choice.

However, Trump’s plans to impose tariffs on goods produced in Mexico by foreign companies could complicate this strategy. Sellers might need to carefully navigate these evolving policies to maintain cost efficiency.

Conclusion: Preparing for an Uncertain Future

Trump’s return to the White House brings both opportunities and risks for the cross-border ecommerce sector. While U.S.-based businesses may thrive under renewed domestic focus, international sellers face a more challenging landscape. Higher tariffs, fluctuating logistics costs, and potential currency impacts are just a few of the hurdles that could shape the industry in the coming years.

For cross-border e-commerce players, staying agile and informed will be crucial. Exploring new supply chains, leveraging local partnerships, and maintaining a flexible business model will be key strategies to weather the potential storm. As with any major political shift, preparedness and adaptability will be essential.