Global trade is being rewritten again - this time, with digital brands caught in the crossfire. The U.S. isn’t just targeting China; it's resetting the rules for imports, manufacturing, and fulfillment at scale. For DTC (Direct-To-Consumers) companies built on lean margins and global supply chains, this moment demands urgent adaptation.

Timeline & Context: The Bigger Tariff Picture

The new wave of U.S. tariffs is part of a broader strategy shaped by economic nationalism, election-year politics, and the push to secure critical supply chains. While China remains the primary focus, the ripple effects reach far beyond.

· May 2024: The Biden administration proposed major tariff hikes on Chinese electric vehicles, semiconductors, solar panels, batteries, and critical minerals - framing it as a move to curb tech dependency and signal strength ahead of the election.

· Throughout 2024: Lawmakers and trade bodies increased scrutiny on the de minimis exemption, which lets sub-$800 imports avoid tariffs and customs. This impacts platforms like Temu, Shein, and Alibaba that ship low-cost goods directly to U.S. consumers.

· Beyond China: The tariffs reflect a wider move to reroute supply chains. Vietnam, Mexico, and others - often used as intermediaries for Chinese goods - are under growing U.S. trade pressure.

· Summer–Fall 2024: Bipartisan support grows to reform the de minimis rule. If passed, many DTC goods now entering tariff-free could face duties, inspections, and delays.

· Jan–March 2025: State-level probes into Chinese e-commerce platforms ramp up. TikTok Shop, Shein, and Temu adjust seller terms to account for potential new tax and customs burdens. Read our breakdown on the potential TikTok ban in the U.S.

· April 2025 (Now): The U.S. Trade Representative (USTR) confirms final decisions are expected by summer. While tariffs on tech products are active, rulings on consumer goods and cross-border fulfillment are still pending, leaving DTC brands in limbo.

Impact on DTC Companies: Disruption and Opportunity

The new tariffs and tightening of the duty-free import loophole have hit DTC brands reliant on Chinese manufacturing and fulfillment. Shein and Temu – responsible for nearly 1 billion shipments under this exemption in 2023 and 17% of the U.S. discount market - face major cost increases.

At the Canton Fair, Chinese exporters reported sharp drops in U.S. orders after a 145% tariff, with companies like Conmo Electronic halting shipments amid market uncertainty.

Meanwhile, some see upside: ThredUp supports the policy shift, arguing it curbs ultra-cheap imports and favors sustainable, higher-quality fashion choices. The result is a rapidly shifting landscape that challenges low-cost DTC players and rewards adaptability.

What Can DTC CMOs Do Now While Tariffs Are Still in Motion?

The new U.S. tariffs on Chinese imports and the possible elimination of de minimis exemptions aren’t fully in effect yet. But the writing is on the wall, and smart DTC brands can start adjusting before the shock hits. Here’s how CMOs can act decisively in this interim period:

1. Run Cost Scenarios and Model Tariff Impact

Collaborate with finance, operations, and supply chain teams to create "what-if" models, assessing how tariff changes affect your product mix and sourcing. Identify 5-10% of SKUs most dependent on Chinese sourcing and calculate breakeven points. Test alternative messaging or bundling for vulnerable products to avoid marketing campaigns that may face cost hikes or delivery delays. This helps prioritize at-risk SKUs and geographies.

2. Pressure-Test Your Fulfillment Network

Audit your logistics and shipping processes, estimating cost and delay impacts if duty-free import threshold is eliminated. Test for two weeks by routing orders through a domestic fulfillment partner, comparing costs and delivery speed. Testing backup options with third-party logistics (3PLs), or regional hubs now allows time to scale quickly if rules change, without an immediate switch.

3. Pause Risky Creative Investments for High-Tariff SKUs

Pause large creative, influencer campaigns, or paid ads for products reliant on Chinese suppliers or tight margins. There's a risk of promoting products with upcoming price hikes or availability issues. Shift budget to evergreen or domestic-first products, focusing on brand-building instead of product-level campaigns until more clarity emerges.

4. Begin Messaging Agility Training

Prepare transparent messaging frameworks for potential tariff impacts. Train teams on addressing cost shifts and delays with empathy. Draft a templated message explaining price changes and test it in a low-risk email campaign to gauge audience reaction. Proactive communication will build customer trust and prevent reactive responses under pressure.

5. Monitor Policy Sources and Market Signals Weekly

Assign a team member, preferably in strategy or product marketing, to monitor U.S. Trade Representative statements, customs updates, and macroeconomic news from sources like Reuters and Bloomberg. Set up a shared dashboard with curated feeds and trade watchlists, tracking LinkedIn discussions from global retail experts and DTC operators for early signals to help your brand pivot.

6. Get Customers Involved in Value-Based Loyalty

Build loyalty programs or waitlists focused on experience and mission, not price. Engage core fans with VIP campaigns offering perks like early access, sustainability efforts, or local production support to strengthen brand loyalty during challenging times.

Read how we helped a $4B brand monitor sentiment and topics discussed on social media for message tailoring.

Strategic Recommendations for DTC Businesses & CMOs

Navigating the fallout from the latest U.S. tariffs on Chinese goods requires proactive, informed leadership. For DTC brands, these changes aren’t just about supply chain mechanics – they touch every part of your customer experience, pricing psychology, and operational agility. Here’s how CMOs, together with other business functions, can lead that transformation effectively:

1. Reassess Supply Chain Dependencies

The business can start mapping supply chain risks with your ops team. Identify suppliers most exposed to tariffs and explore nearshoring in Vietnam, Mexico, or India. After the 2018–2019 U.S.-China tradewar, Steve Madden shifted production to Cambodia and Brazil, using the disruption to rethink supplier relationships and reduce geopolitical risk. Marketing plans should align with evolving sourcing realities.

What CMOs should do: CMOs should align with operations to ensure marketing reflects realistic fulfillment. Delayed products can undermine high-performing campaigns, making cross-team collaboration crucial during supply chain disruptions.

2. Adjust Pricing Models

The business can use value-based pricing and creative bundling to maintain perceived value. Consider tiered models or premium positioning, while keeping entry SKUs competitive. In 2019, Everlane adjusted prices amid rising tariffs and labor costs, openly communicating the changes to customers and linking them to fair wages and sustainability, reinforcing trust while navigating cost pressures.

What CMOs should do:
Work with analytics and finance teams to model pricing elasticity across SKUs. Then collaborate with brand and content teams to message the pricing changes in a value-driven, customer-first narrative.

3. Invest in Domestic Fulfillment

The business can evaluate if 3PLs, domestic micro-warehousing, or U.S.-based fulfillment can cut delivery times and customs risk. Marais USA shifted to a DTC model and moved production to Los Angeles, trading higher costs for shorter lead times, cost stability, and better manufacturer relationships, ultimately improving supply chain control and customer satisfaction.

What CMOs should do:
Tie logistics insights into your ad targeting—customers increasingly expect 2–3 day delivery windows. Marketing messages about local fulfillment, fast shipping, or “Made in USA” (or your domestic country) can improve conversion rates while offsetting higher costs.

4. Enhance Transparency with Customers

The business can frame changes as a brand evolution focused on quality or sustainability. Be transparent about sourcing and pricing shifts. Patagonia exemplifies this, using radical transparency to build trust—openly communicating cost structures, delays, and environmental trade-offs, even encouraging mindful shopping during COVID, which deepened customer loyalty.

What CMOs should do:
Use transparency as a retention tool—embed it in emails, product pages, and ads. Keep customers emotionally invested, especially when higher costs might impact buy intent. Trying to sneak price increases past your loyal base will erode trust faster than a late package.

5. Monitor Regulatory and Market Shifts Constantly

The business can create a regulatory “war room” with trade alerts, legal collaboration, and cross-functional teams to assess impact and pivot fast. Apple did this during the 2019–2020 U.S.-China trade war, quietly shifting production to India and Vietnam while lobbying for tariff exemptions, balancing compliance with business continuity.

What CMOs should do:
Build agility into digital campaigns by shortening approval timelines, using flexible creative, and avoiding rigid strategies. Marketing should adapt quickly in near real-time to shifting market signals.

Should CMOs Reduce Ad Spend During This Turbulent Time?

In periods of economic uncertainty, such as during trade tensions or recessions, it's common for companies to consider cutting advertising budgets. However, historical data suggests that maintaining or even increasing ad spend during downturns can yield long-term benefits.​

A Forbes article highlights that during the 2008 recession, while overall ad spending in the U.S. dropped by 13%, companies that sustained their advertising efforts often emerged stronger post-recession. These businesses were able to capture greater market share and achieve higher sales growth compared to competitors who reduced their ad spend.

Instead of slashing budgets, smart CMOs should reallocate spend. Focus on profitable SKUs, tariff-free regions, and upper-funnel brand messaging that builds resilience. One notable example is Outerknown, a sustainable apparel brand. After a 25% ROAS drop on Facebook post-iOS 14, Outerknown diversified spend into direct mail, podcasts, Pinterest ads, and Google Shopping to reduce platform dependence and adapt to new digital advertising constraints.

Our Opportunity Audit is a great tool to help you navigate through this turbulent time. Read how we helped this retailer gain $30M in additional profit.

In Summary

As global trade tensions reshape supply chains and digital ecosystems, DTC brands face both risk and opportunity. Tariffs, shifting consumer expectations, and platform disruptions demand agility, not retreat. CMOs must balance short-term pivots, like diversified channels and clear messaging, with long-term strategies in fulfillment, data, and brand resilience. The winners won’t be those who cut spend reactively, but those who adapt decisively.

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About Crealytics

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Crealytics is an award-winning full-funnel digital marketing agency fueling the profitable growth of over 100 well-known B2C and B2B businesses, including ASOS, The Hut Group, Staples and Urban Outfitters. A global company with an inclusive team of 100+ international employees, we operate from our hubs in Berlin, New York, Chicago, London, and Mumbai.