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A lot has changed since Donald Trump’s first term in the White House. E-commerces share of total retail sales has risen from 15% at the end of 2020 to 16.2%a 1.2 percentage-point increase, but a near-10% rise in real terms. The number of packages entering the United States that come under the $800 de minimis threshold, which allows imports to enter the country “duty free,” has gone from around 600,000 in 2020 to more than one million in 2024. But the biggest change of all in the world of online retail is about to come, thanks to Trump himself, who has slapped a 10% tariff on goods coming into the country from China. This is all part of a bigger game of high stakes poker between the U.S. and China when it comes to trade negotiations, says Dan Ives, managing director at Wedbush Securities. But in this case, the poker game could adversely affect the 335 million citizens of the United States who increasingly rely on e-commerce. Trump himself has admitted that Americans could feel some pain as a result of the tariffs, which include fees on imports from China. (Similar tariffs on Mexico and Canada were delayed after both countries agreed on Monday to send 10,000 troops to their respective borders with the U.S.) There are a lot of businesses that source from China that are going to have a lot of problemsand a lot of those brands go under the radar for how important they are to the wider e-comm ecosystem, says Ben Graham, an independent e-commerce expert. The random stuff that is non-premium is going to take a hit I thinkand thats the stuff that aggregators went pretty hard into.” Michael Wieder, cofounder of Lalo, a baby and toddler products company, sources from manufacturers’ products all over the world, but is pretty reliant on China, he says. In our industry, durable goods in the baby space, thats where its made, and that’s where there’s a sophisticated-enough supply chain and a trustworthy-enough supply chain. Wieder points out that regulated products such as Lalos come from China by necessityits where the knowledge base on how to build those products safely sits. Wieder can’t say for sure whether his company will be hit by the tariffs because the regulation has been very vague. Theres a lot of ambiguity right now, quite frankly, that were dealing with and learning about every minute to find out what our exposure is, he says. Besides first-party retailers selling through their own websites, the impact of tariffs on Chinese-sourced goods will be significant across the whole e-commerce industry. Around four in 10 third-party sellers on Amazon are exposed to Chinese-based sourcing of products, according to Bank of Americaand therefore will likely see their costs rise as a result of tariffs that hit Chinese imports to the U.S. Amazon particularly wont want to suffer the losses, so will likely try and make up any short falls in seller or ad revenue by pushing up their fees, says Graham, which will push the prices even higher, and as Amazon doesnt like to be the highest-priced channel you sell on, brands will have to raise other channel prices accordingly. Wieder, for his part, has decided to take the hit on income temporarilybut says that it might not be possible in the long run. Were going to have to understand the long-term impact, but for most people, youll first see the impact on your consumables, your groceries, that will start to take effect pretty quickly. He believes the first inkling that prices are going up will appear within eight to 12 weeks because businesses have enough stock in storage to last until then. But those customers will have to stick with the businesses that remain, Wieder adds. I think that there’s going to be a contraction of newer businesses and newer brands entering the market, he says. It takes more capital than ever to do that, and it’s going to be expensive to buy the inventory.
Category:
E-Commerce
Dozens of employees at the U.S. Education Department were put on paid administrative leave in response to President Donald Trumps order banning diversity, equity and inclusion programs in the federal government, according to a labor union that represents hundreds of workers in the agency. It’s unclear how many workers were put on leave or for what reasons, said Sheria Smith, president of American Federation of Government Employees Local 252. The majority of employees placed on leave do not work in DEI initiatives and span all branches of the agency, she said, from an office that sends billions of dollars to K-12 schools to an office that enforces civil rights laws. The shakeup comes as Elon Musk‘s Department of Government Efficiency, or DOGE, pushes to cut programs and federal workers at departments across the government, including the U.S. Agency for International Development. A DOGE team was working at the Education Department on Monday to implement Trump’s executive orders and agenda, said Madison Biedermann, an Education Department spokesperson. The department did not immediately comment on the personnel changes and would not say how many employees were placed on leave. At least 55 Education Department workers received an email Friday saying they were being put on paid leave effective immediately pursuant to Trump’s executive order. It wasnt being done for any disciplinary purpose, according to a copy of the email obtained by The Associated Press. Those placed on leave lost access to their government email accounts and were told not to report to the office. They include a range of staff members and managers across the department, which employs more than 4,000 workers in Washington and regional offices across the country. Most of those on leave appear to have taken a voluntary diversity training seminar offered by the department, Smith said. The Diversity Change Agent program has been promoted by the agency for years, including during Trumps first term in office. Graduates of the two-day program were expected to serve as role models and help improve the department’s capacity to attract and retain a diverse workforce, according to an internal email from 2019 obtained by the AP. Smith said hundreds of employees have taken the training, but it was unclear if all of them were placed on leave. She said many people were under the impression the training was strongly encouraged or required. It seems unfair to encourage or require people to take a training and then four or five years later place them on administrative leave, Smith said. Some current employees who are on leave said the action could disrupt the agency’s core work, including the management of federal student loans and the FAFSA form for student financial aid. The workers spoke on the condition of anonymity for fear of reprisals. Sen. Patty Murray, D-Wash., a former teacher and member of the Senate Health, Education, Labor and Pensions Committee, said Trump is purging employees for taking a training course that his administration encouraged them to take. This wont help our kids learn or even save us money, Murray said on the social media site X. Hes just breaking services people rely on. Trumps order called for all DEI staff in the federal government to be put on paid leave and eventually laid off. Its part of a broader crackdown on diversity programs that the Republican president says are racist. Trump campaigned on a promise to shut down the Education Department, which he says has been infiltrated by radicals, zealots and Marxists. He said the agency’s power should be turned over to states and schools. Collin Binkley, Associated Press The Associated Presss education coverage receives financial support from multiple private foundations. The AP is solely responsible for all content. Find the AP’s standards for working with philanthropies, a list of supporters, and funded coverage areas at AP.org.
Category:
E-Commerce
U.S. President Donald Trump signed an executive order on Monday ordering the creation of a sovereign wealth fund within the next year, saying it could potentially buy the short video app TikTok. Trump offered little in the way of detail and it was unclear how such a wealth fund would work. Typically such funds rely on a country’s budget surplus to make investments, but the U.S. operates at a deficit. Its creation also would likely require approval from Congress. “We’re going to create a lot of wealth for the fund,” Trump told reporters. “And I think it’s about time that this country had a sovereign wealth fund.” Trump had previously floated such a government investment vehicle as a presidential candidate, saying it could fund “great national endeavors” like infrastructure projects such as highways and airports, manufacturing, and medical research. Administration officials did not say how the fund would operate or be financed, but Trump has previously said it could be funded by “tariffs and other intelligent things.” Treasury Secretary Scott Bessent told reporters the fund would be set up within the next 12 months. “We’re going to monetize the asset side of the U.S. balance sheet for the American people,” Bessent said. “There’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.” The Biden administration also was considering establishing such a fund prior to Trump’s election in November, according to The New York Times and Financial Times. Investors on Wall Street said the news came as a surprise. “Creating a sovereign wealth fund suggests that a country has savings that will go up and can be allocated to this,” said Colin Graham, head of multi-asset strategies at Robeco in London. “The economic rules of thumb don’t add up.” There are over 90 such funds across the world managing over $8 trillion in assets, according to the International Forum of Sovereign Wealth Funds. In another surprise twist, Trump suggested the wealth fund could buy Tiktok, whose fate has been up in the air since a law requiring its Chinese owner ByteDance to either sell it on national security grounds or face a ban took effect on Jan. 19. Trump, after taking office on Jan. 20, signed an executive order seeking to delay by 75 days the enforcement of the law. Trump has said that he was in talks with multiple people over TikTok’s purchase and would likely have a decision on the app’s future in February. The popular app has about 170 million American users. “We’re going to be doing something, perhaps with TikTok, and perhaps not,” Trump said. “If we make the right deal, we’ll do it. Otherwise, we won’twe might put that in the sovereign wealth fund.” Jarrett Renshaw, Pete Schroeder, and Suzanne McGee, Reuters
Category:
E-Commerce
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