Trump is re-elected! Cross-border sellers will have a hard time in the next four years

Under the attention of the world, the 2024 US presidential election came to an end, and the results shocked the world. Trump was re-elected as the next president!

This result will have a profound impact on the cross-border e-commerce industry as Trump's trade policy and foreign relations strategy will have a profound impact on the industry.

Looking back at a series of policies during his previous term, including imposing high tariffs and strengthening trade restrictions, the next four years for the cross-border industry will be full of challenges and opportunities.

So what impact will Trump’s re-election have on China and Chinese cross-border sellers?

Below, we will briefly analyze the possible impact on cross-border sellers so that everyone can be mentally prepared in advance.

Trump has repeatedly declared that if he is re-elected president, he will impose a 10% tariff on all foreign goods imported into the United States, cancel China's "most favored nation" trade treatment, and impose tariffs of up to 60% on imports from China.

For merchants registered as U.S. companies , more resources will be allocated. The tariff reduction from 25% to 15% will create a more favorable development environment for U.S. e-commerce platforms and sellers, and local stores may gain more advantages in terms of policy support and market promotion.

For Chinese merchants focusing on the North American market , a 60% tariff will deal a fatal blow, directly compressing sellers' profit margins. The increased cost of goods may lead to a decline in consumer purchasing power, thereby causing a decline in the competitiveness of Chinese sellers' products, and further leading to a decline in traffic and orders.

The three categories of goods that will be most affected by this policy are: mobile phones, computers and other office machines, and textiles, clothing and bags. The share prices of related listed companies may fall.

If Trump continues to implement similar policies, cross-border e-commerce sellers may need to reconsider their pricing strategies, supply chain choices, and market positioning.

Trump advocates intervening in the exchange rate of the U.S. dollar through policy means to depreciate it, aiming to increase the export of U.S. goods and restrict the import of foreign goods.

The US dollar exchange rate is one of the "lifelines" of cross-border sellers. As long as the exchange rate moves by one point, the profit will be affected immediately. If the US dollar depreciates, Chinese sellers will face a direct reduction in profits after converting the US dollar payment they receive into RMB.

In addition, the depreciation of the US dollar may also trigger fluctuations in the global currency market and affect the stability of cross-border payments and settlements. Sellers need to reasonably arrange currency reserves in advance and consider whether to adopt diversified payment and settlement methods.

For TK sellers, the future development is very strong. During the campaign, Trump thanked TikTok many times and publicly stated that he would not ban TikTok. He has also registered his own account @realdonaldtrump on TikTok, which may be a good signal for TikTok sellers.

Cross-border sellers can seize this opportunity to strengthen cooperation with social media such as TikTok to increase product exposure and user stickiness.

Trump is less likely to ban cross-border e-commerce platforms with Chinese capital, but he will not let them grow. First of all, low-price platforms such as Temu and Shein can help reduce inflation in the United States, and the lower-class people in the United States still need such products. In addition, platforms such as Temu not only have investments in the United States, but are also major sponsors of other advertising platforms such as Google and Facebook.

But Trump will not allow Chinese platforms to grow big enough to threaten Amazon's position, so platforms like Temu will still be able to succeed, but the ceiling will still be limited.

As early as 2019, Trump signed a memorandum aimed at curbing the sale of counterfeit goods on US e-commerce platforms, and expressed his intention to strengthen intellectual property rights review of global imported goods and increase penalties on goods deemed to infringe US intellectual property rights.

In view of this, the Trump administration may strengthen supervision of cross-border e-commerce, especially in terms of antitrust and intellectual property protection. Stricter regulations may be enacted, which will increase the difficulty and operating costs for Chinese cross-border e-commerce companies to enter the North American market.

The Trump administration’s policies could affect global logistics networks, including shipping, air and land transportation.

The logistics and transportation policies for international trade may be adjusted, such as strengthening the management of ports and customs, and improving the inspection standards for goods. This will affect the logistics and transportation efficiency of cross-border e-commerce, extend the customs clearance time for goods, and increase logistics costs and transportation risks.

In addition, Trump has expressed his intention to renegotiate trade agreements such as the North American Free Trade Agreement. If the trade agreements change, cross-border e-commerce companies will need to re-adapt to new trade rules and transportation requirements, which will increase the operational complexity and uncertainty of the companies.

Overall, no matter who is elected, it will definitely affect the cross-border e-commerce industry to a certain extent and bring more uncertainty.

Sellers do not need to be too anxious and should be prepared to deal with market fluctuations. They can consider reducing the risk of a single market and avoid concentrating all resources on a single market when deploying supply chains and markets in North America to achieve risk diversification.

More importantly, the best way to deal with this is for sellers to improve the competitiveness of their products and maintain flexible market adaptability.