U.S. Sellers Struggle with Tariffs: Risk of Widespread Closures

Recently, the U.S. government announced a so-called "reciprocal tariff" policy, imposing tariffs of up to 145% on trade partners. This unilateral move has caused an economic "tsunami," violently disrupting global supply chains. *Fortune* magazine reports that small and medium-sized U.S. sellers on Amazon are hit hardest, facing soaring costs, broken supply chains, and customer losses, pushing many to the brink of collapse.  

1. The Tariff Policy’s "Death Spiral" 

On April 2, the Trump administration signed an executive order imposing 145% tariffs on Chinese goods, 20%-46% on EU and Japanese imports, and 25%-46% on textiles and electronics from Southeast Asia. This directly caused 70% of Amazon sellers relying on Chinese suppliers to face skyrocketing costs. For example, an Idaho-based sensory swing company with $5 million annual sales saw tariffs on one shipment from China jump from $4,707 to $190,000—38% of its yearly profit.  

2. Sellers’ Survival Struggles  

Cost Squeeze and Profit Collapse: Lisa Lane, an Amazon seller of shower hoses, said tariffs added $200,000 to her annual production costs. She could only raise prices by 10%, slashing her profit margin from 15% to 2%. Goldman Sachs estimates Amazon third-party sellers average under 15% profit margins, while tariff costs now triple their net profits.  

Supply Chain Breakdown: Cargo inspection delays at U.S. ports have extended to six weeks. Lisa Lane’s two stranded containers caused a 40% sales drop. Another Washington seller, Thompson, tried shifting production to Vietnam but found costs 30%-50% higher than China, with unstable quality, forcing him to abandon the plan.  

Customer Loss and Shrinking Demand: U.S. households now spend $5,200 more yearly due to tariffs, hitting low-income families hardest. Amazon data shows home goods and electronics sales dropped 35% after price hikes. Some products saw panic buying, but long-term demand remains weak.  

3. Industry Chain Reactions and Global Shock waves  

Small Business Collapse: The Peterson Institute found 90% of tariff costs fall on U.S. firms and consumers, not trade partners. U.S. retail bankruptcies rose 42% year-on-year in Q1 2025, with Amazon sellers accounting for 35%. Chinese wedding dress sellers closed due to 145% tariffs, while U.S. producers couldn’t replace them due to technical and cost gaps, causing shortages.  

Global Supply Chain Shifts: 30% of U.S. sellers tried moving production to Mexico or Vietnam, but Southeast Asia’s rising labor costs and poor infrastructure raised overall expenses. Meanwhile, Chinese sellers are shifting to RCEP markets, using Vietnam as a transit hub to cut tariffs via origin rules.  

Recession Risks Grow: Goldman Sachs cut its 2025 U.S. GDP growth forecast from 2.2% to 1.7%. Moody’s warns a 3-5 month tariff extension could trigger a recession. Global trade may shrink 25%, matching 1930s Depression levels.  

4. Expert Warnings and Policy Rethink 

Self-Defeating Tariffs: Economist Jason Furman calls tariffs a "regressive tax," disproportionately harming women and single-parent families. The Trump administration’s "manufacturing revival" plan ignores U.S. industrial weaknesses—local production costs are 3-5 times overseas rates.  

Global Backlash and System Collapse: China retaliated with 125% tariffs on U.S. goods, followed by 15 nations including the EU and Canada. The WTO dispute system is paralyzed. UN Secretary-General António Guterres warns trade wars have no winners, only accelerating deglobalization.  

Business Adaptations: Some U.S. sellers use "semi-finished exports + Mexican assembly" under USMCA rules to avoid tariffs but must meet 60% local content rules. Others target Middle Eastern and ASEAN markets via TikTok Shop, cutting middlemen costs.  

This "reciprocal tariff" storm is tearing apart global trade networks. For U.S. sellers, tariffs aren’t just about costs but survival. Without policy changes, Amazon’s small-business "closure wave" could spiral into a nationwide crisis, forcing ordinary Americans to pay for unilateralism.