(Yicai) Feb. 27 -- Chinese cross-border e-commerce merchants have adjusted their strategies due to uncertainties related to potential tariff changes for small parcels.

On Feb. 1, US President Donald Trump signed an executive order ending the de minimis tariff waiver for items valued under USD800. However, the US reinstated the policy on Feb. 7. Despite that, Chinese cross-border vendors are preparing for further changes.

The US tariff policies are influenced by economic, political, and international relations factors, which creates huge uncertainties, said Zhang Zhouping, executive dean of Bense Think Tank. Sellers and platforms need to find new equilibrium points and adjust operational strategies to be ready for tariff challenges, Zhang added.

Logistics services providers quickly responded to the US tariff adjustment, auto parts merchant Peng Jing told Yicai.

Comprehensive tariffs for non-textile items could reach 25 percent of the declared value, which could significantly affect vendors’ profit margins, according to a logistics services provider. However, to avoid passing all costs on to consumers, some merchants decided to raise prices by only 10 percent.

Some Chinese cross-border e-commerce shops have begun using warehouses in destination countries for localized shipping, distribution, and return services. For example, toy seller Chen Limin plans to move more inventory to overseas warehouses to better handle policy changes. Peng also mulls a similar move for greater flexibility in responding to policy shifts.

However, overseas warehouse operations carry risks, including high costs to ship back unsold goods and large initial investments, including high logistics and storage costs, as well as inventory risks, Chen explained.

Peng plans to enter the Russian, Korean, and Mexican markets this year, expanding from Amazon, AliExpress, and Temu two years ago to six more e-commerce platforms, including TikTok Shop, Walmart, Shein, and Ozon, by the end of 2025.

Chen intends to remain focused on the European and US markets while expanding in Latin America through local e-commerce sites like Mercado. She will also strengthen cooperation with peers to broaden sales channels.

In this complex environment, some Chinese cross-border e-commerce platforms have introduced subsidy policies to aid merchants.

For example, TikTok Shop launched six incentives, including the New Business Navigation Plan and Brand Export Acceleration Plan, for different merchant types, and Shein introduced a Sales Boost program offering platform-wide traffic support worth billions of Chinese yuan (equal to hundreds of thousands of US dollars) to cross-border merchants across all categories.

Editor: Futura Costaglione