Special Statement:
The views presented by Hui Creative Services Inc. reflect our own independent perspective. Readers and listeners are advised to make their own judgments based on their specific circumstances.
Last week, former President Donald Trump held a private meeting with several major U.S. retailers highly familiar with the Chinese cross-border e-commerce sector, including Walmart, Costco, Target, Best Buy, and Home Depot. The focus was on understanding the challenges faced by the retail industry following significant tariff hikes.
After the meeting, both Trump and the U.S. Treasury Secretary publicly emphasized three points:
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US-China negotiations have begun and are progressing smoothly
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The U.S. will significantly reduce tariffs on Chinese goods, though they will not be eliminated entirely
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The U.S. does not seek to decouple from China but aims to help China address excess production capacity
However, optimism quickly dimmed when China’s Ministry of Foreign Affairs publicly denied any active negotiations. Amid the conflicting messages, many traditional exporters and factory owners in China began to realize that they might soon fire their last shot in this unprecedented tariff war. Meanwhile, cross-border e-commerce sellers, under the burden of mounting debts and inventory pressures, are seeking new avenues for survival.
Today, Hui Creative Services Inc. consolidates reports and observations from last week to help illuminate potential paths forward.
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As U.S.-China economic relations shift from collaboration to confrontation, cracks in globalization are becoming increasingly evident. After more than a decade of rapid development, China’s cross-border e-commerce sector may now be entering a long adjustment phase.
During this period:
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Domestic resources will become increasingly scarce and valuable.
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Hui Creative Services Inc. will leverage its overseas strengths to develop and connect more new resources and sales channels for its members, offering access to opportunities unavailable to most sellers.
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Our goal is to empower sellers to continue growing amid uncertainty.
For more exclusive resources and channels, please follow:
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Hui Creative Services Inc. WeChat Mini Program - Service Marketplace (targeted resource displays based on member groups)
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Hui Creative Services Inc. Official WeChat Service Account (for updates on overseas markets and platform trends)
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Hui Creative Services Inc. Academy (soon launching a specialized POD Customization Course to help sellers reduce inventory risks and find new growth opportunities)
Part 1 - Reactions of Major US Retailers to Tariffs
After raising tariffs on Chinese imports to 240%, Donald Trump convened a meeting with ten of America’s largest retailers to discuss the tariff impacts on the U.S. retail industry. Here’s a summary of the key discussions:
Walmart
Walmart CEO Doug McMillon noted that tariffs are not new challenges for Walmart. Thanks to years of preparation, two-thirds of Walmart’s merchandise is now produced or assembled in the United States. The remaining one-third, mainly from China and Mexico, faces cost pressures. McMillon acknowledged that consumers may experience price hikes but emphasized that Walmart will continue optimizing its supply chain to minimize consumer impact.
Home Depot
Home Depot’s CEO described the meeting as “informative and constructive.” The company will expedite its supply chain diversification to better shield itself from tariff-related risks.
Target
Target is accelerating its supply chain adjustments by relocating production of private-label brands like All in Motion and Cat & Jack from China to countries like Guatemala and Honduras. Previously, 30% of these products were made in China; this figure is expected to drop to 25% next year.
Kroger
Kroger stated that while its core fresh product supply chain is domestic, it will prioritize sourcing imported goods from regions less impacted by tariffs to maintain competitive pricing.
Costco
Costco has demonstrated the fastest response among major retailers. CEO Ron Vachris highlighted that Costco’s flexible global supply chain enables swift replacement of tariff-impacted products with alternatives from unaffected countries. Costco began scaling back procurement from high-tariff regions as early as the initial retaliatory tariffs announcement.
Best Buy
Best Buy reacted more slowly but is now under immense pressure. CFO Matt Bilunas warned that tariffs might force the company to raise product prices, though it remains unclear how consumers will respond.
MGA Entertainment
MGA, a major toy supplier to Walmart and Target, plans to shift 40% of its manufacturing capacity from China to India, Vietnam, and Indonesia within six months.
Hewlett Packard Enterprise (HPE)
HPE, a global server manufacturer, shared that it had already substantially scaled back production in high-tariff regions over the past five years. In the current situation, HPE will adjust both its industrial layout and product pricing to mitigate the impact.
Apple
Although Apple has not officially commented on the new tariffs, it announced a $500 billion investment plan in the U.S. over the next four years, including building a major AI server factory in Texas.
Lowe’s
While Lowe’s attended the retailer meeting, it has not publicly commented on the discussions or their potential impacts. However, during the earlier 10% tariff phase, Lowe’s executives had expressed concerns about market uncertainties.
Why Were E-Commerce Giants Not Invited?
Notably, U.S. e-commerce giants like Amazon, Google, and Meta (Facebook) were excluded from the meeting. Analysts believe this reflects Trump’s preference for supporting traditional industries over digital platforms, which he views as damaging to physical commerce and national fiscal health.
The tariff moves are widely seen as a preliminary crackdown on the e-commerce sector, aiming to help traditional retailers reclaim market share.
This indicates that stronger regulatory actions targeting e-commerce giants are likely on the horizon.
Part 2 - How Low Will US Tariffs on China Eventually Go?
Following the meeting with retail leaders, Trump and Treasury Secretary Scott Bessent signaled that U.S. tariffs on Chinese goods could be significantly lowered. Bessent’s public remarks are particularly worth noting for those in cross-border e-commerce:
“America First” Does Not Mean Isolationism
The U.S. aims to assume more responsibility in international institutions like the IMF and World Bank, emphasizing collaborative leadership to restore fairness in the global economic system.
Global Trade Imbalances Are No Longer Sustainable
The U.S. has long borne the cost of global trade imbalances, resulting in a hollowed-out manufacturing sector and fragile supply chains. Structural adjustments through tariffs and other measures are now deemed necessary.
Positive Global Response to Trade Rebalancing
Over 100 countries have expressed willingness to participate in U.S.-led trade restructuring, and constructive dialogues are underway.
The Problem Extends Beyond Trade
Long-term global dependence on U.S. consumer demand, combined with excess savings and suppressed wages in some countries, has weakened global economic resilience.
Strong Dollar as a Symbol of Stability
Bessent reaffirmed that the U.S. dollar remains the world’s most trusted reserve currency, with no realistic challengers on the horizon.
IMF and World Bank Must Refocus on Core Missions
Global institutions should prioritize financial stability, trade rebalancing, and energy accessibility, rather than diluting focus on peripheral issues.
Regarding U.S.-China trade relations, Bessent emphasized:
First Step: De-escalation
Lowering excessive tariffs is seen as a prerequisite for calming tensions, though formal negotiations have yet to begin.
Structural Transformation in China
The goal is to encourage China to reduce its reliance on exports and boost domestic consumption, transitioning from the “world’s factory” to a consumer-driven economy. The U.S. is willing to support this shift.
Key Milestone in Q3
The third quarter of this year may mark a critical turning point in U.S.-China trade relations. If no agreement is reached, the U.S. is prepared to conclude new trade pacts with other nations, excluding China.
A Two-to-Three-Year Window for China
A comprehensive U.S.-China agreement is possible if China reduces its export dependence within two to three years, aligning with America’s manufacturing resurgence timeline.
Following Bessent’s statements, Walmart suppliers in China reported that previously delayed orders were being reactivated — a signal that trade adjustments are already subtly underway.
Hui Creative Services Inc.’s Forecast for Tariff Trends
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Regardless of negotiation outcomes, Trump is likely to significantly lower current tariffs for practical economic reasons.
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However, the U.S. will strictly regulate the flow of low-priced Chinese goods into its market, especially via e-commerce.
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A phased strategy will separate strategic industries (subject to extremely high tariffs, possibly up to 3000%) from non-strategic ones (subject to 30–70% tariffs).
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Over the next two to three years, the U.S. will aggressively evaluate and rebuild domestic manufacturing capacities while maintaining tight scrutiny over low-value imports.
Part 3 - Is Europe the Next Hot Market for Chinese Sellers?
Many Chinese sellers mistakenly assume that if U.S. tariffs intensify, Europe will offer an easy alternative. However, this could be a costly misjudgment.
While the U.S. economy remains large and relatively open, Europe poses numerous barriers:
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High VAT burdens
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Complex cross-border tax audits
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Strict compliance requirements (particularly for data privacy under GDPR)
Unlike the U.S., where cross-border logistics channels are more forgiving, European customs and tax authorities are far more aggressive. Sellers operating without full compliance risk heavy penalties.
Moreover, the European digital advertising ecosystem is highly restricted, relying almost solely on keyword-based promotions due to strict privacy laws.
Thus, profitability in Europe will likely be lower, and operational risks significantly higher, than in the United States.
Part 4 - Platform Strategies: Major Shifts by Amazon, Temu, and TikTok
Despite pressures, the U.S. remains an indispensable market for global sellers. Recent strategic adjustments by major platforms reveal clear trends:
Amazon: Price Increases and Discount Store Expansion
Amazon canceled numerous Vendor Central orders to avoid tariff-induced price hikes. CEO Andy Jassy signaled that third-party sellers may need to raise prices, indirectly nudging Amazon’s Haul low-price mall expansion strategy.
Haul now features prominently on Amazon’s U.S. and Canadian desktop versions, and rumors suggest that entry thresholds for Haul may soon be lowered.
Temu: From Full Control to Global and Localized Expansion
Facing the end of T86 clearance advantages in the U.S., Temu is rapidly localizing, shifting focus to semi-managed sellers, and expanding aggressively into Canada, Mexico, and over 90 other countries.
TikTok: Focus on POD and Local Store Development
TikTok is pivoting toward supporting ACCU U.S.-registered stores (Chinese owners with U.S. entities) and is selectively allowing POD category development, while also ramping up recruitment of local sellers in emerging markets like Mexico and Spain.
Interested in Expanding Your Business Through Amazon, TikTok, or Temu?
If you are interested in joining platforms such as Amazon, Temu, or TikTok as a seller, or if you are seeking expert support for account management, operational optimization, or product marketing services, Hui Creative Services Inc. is here to help.
With extensive industry experience and a global resource network, Hui Creative Services Inc. provides customized solutions to accelerate your cross-border success.
For more information or partnership inquiries, please contact Hui Creative Services Inc. today.
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