How New Tariffs Could Impact Digital Advertising (April 2025)

Tariffs have long been used as a tool to protect domestic industries, but with sweeping changes set to take effect in 2025, eCommerce businesses—especially those relying on international suppliers—are about to face a new reality. These changes could ripple through everything from supply chains to advertising budgets. Here’s what you need to know.

First, What Are Tariffs?

Tariffs are essentially extra taxes the U.S. government charges on products imported from other countries. Think of it like this: when a toy arrives from overseas, the government may tack on a fee before it can be sold in the U.S. The goal is to encourage people to buy American-made products instead. However, the U.S. hasn’t kept pace with global manufacturing, so producing goods domestically is often far more expensive.

Tariffs can vary by product type and country—sometimes they’re a small percentage, and other times, they are a flat fee per item. While importers typically pay these fees, the costs are often passed along to consumers in the form of higher prices.

What’s Changing in 2025?

Several new tariff regulations are coming into effect that could significantly disrupt global sourcing strategies and product pricing:

1. No More De Minimis Rule for China & Hong Kong

As of May 2, 2025, the U.S. will eliminate the de minimis exemption for packages under $800 from China and Hong Kong. These packages will now face a 30% tariff or $25 per item—whichever is higher.

This change hits marketplaces like Temu and AliExpress especially hard, as they’ve traditionally avoided tariffs by shipping inexpensive items individually. Their U.S. business model may no longer be viable.

2. Tariff Increases Across Other Countries

As of April 9th, 2025, most other countries will see a tariff of 10% on imports to the United States. 

This will likely lead to higher prices on everything from apparel to electronics and accessories.

How Will These Tariffs Affect eCommerce Businesses?

The effects will be felt in several key areas:

• Increased Product Costs: Importing goods becomes more expensive, and businesses may raise retail prices to maintain profit margins.
  
• Supply Chain Disruptions: Companies relying on Chinese or Hong Kong-based suppliers may face delays and added costs, prompting them to find new sources.
  
• Changes in Consumer Behavior: Shoppers may become more price-sensitive, abandon carts more frequently, or gravitate toward U.S.-made goods.
  

What Does This Mean for Digital Advertising?

These changes go beyond operations—they’ll directly impact how businesses market and advertise their products.

How Will These New Tariffs Affect Ad Strategy?

Tariffs can squeeze profit margins, reducing the amount you’re willing (or able) to spend on paid media. Here’s how we might adapt:

• Shift budget to higher-margin products that are less affected by tariffs.
  
  • Ask clients to share margin data and categorize products by low, medium, and high margin.
    
  • Use this data in Google and Meta ad feeds to prioritize spend accordingly.
    
• Test new pricing and promotional strategies to see what resonates in a higher-cost landscape.
  
• Update bid strategies to align with revised performance goals.
  

Should Tariffs Be Mentioned In Ads?

That depends on your brand. Some businesses choose transparency, explaining price increases due to tariffs. Others quietly adjust pricing. If you’re absorbing costs or running promos to offset increases, consider messaging like:

• “Lock in current prices before changes hit”
  
• “Inflation-proof savings”
  
• “Prices going up soon—shop now!”
  

These can help create urgency without getting political.

Should Different Products Be Advertised?

Yes—this is a good time to reassess your product mix. Consider prioritizing:

• Products with stable pricing and strong margins
  
• Domestic or tariff-free items
  
• Subscription models or bundles that offset rising costs
  

What If Tariffs Cause Shipping Delays?

Be proactive in your ad campaigns:

• Run inventory-based campaigns that prioritize in-stock items
  
• Test pre-order campaigns with discounts to manage customer expectations
  
• Clearly communicate shipping timelines to build and maintain trust
  

A Real-World Example: Socium Widget Co

Let’s look at a fictional client, Socium Widget Co, and how their margins are affected:

Before the 50% Tariff:

• Cost of product: $30
  
• Shipping, fees, etc.: $15
  
• CPA target: $45
  
• Total cost: $90
  
• Price per widget: $100
  
• Profit: $10 (10% margin)
  

After the Tariff:

• Cost of product: $45
  
• Shipping, fees, etc.: $18
  
• CPA target: $45
  
• Total cost: $108
  
• Price per widget: $100
  
• Loss: -$8
  

To maintain profitability, they’d either need to slash their CPA by 40% (from $45 to $27)—a tall order—or raise prices, which can hurt conversion rates. Either way, the unit economics become much more challenging.

What Should Marketers Ask Clients Right Now?

To stay ahead of the changes, ask your clients:

1. Where are most of your products manufactured?
   Different countries = different tariff rates. Highlighting products from countries with lower tariffs (e.g., Turkey vs. China) could shape your ad strategy.
   
2. Did you stock up before the tariffs took effect?
   If they made a big pre-tariff order, there may be less urgency to change strategies in the short term.
   
3. What internal conversations have you had about tariffs?
   This can uncover plans or concerns that might not be obvious yet—and help you tailor strategies accordingly.
   

Final Thoughts

Tariffs, among many logistical issues, are also a marketing issue. With higher costs and tighter margins, brands will need smarter ad strategies, clear communication, and a proactive approach to remain competitive in 2025.

If you need help rethinking your paid media strategy in light of these changes, we’re here to chat.