Trump Administration’s Tariff War: What Business Owners Need To Do RIGHT NOW
Updated on May 20, 2025
Transcript
Well, well, well, it's tariff time. I don't know when this video is coming out, but it should be coming out relatively soon. Good old Donald Trump over in America has announced his reciprocal tariffs, and they have set the world a bit ablaze with everything that is going on. There's a lot of chaos, a lot of uncertainty, a lot of pain and blood in the streets, and no one really knows what's going on. So it's been quite a fun time if you are in the e-commerce world or the export and import world at large.
Just a few days ago, I saw an e-commerce entrepreneur who had about $80,000 worth of inventory loaded up on a ship, suddenly got hit with the good old reciprocal tariffs, and now he was looking at paying $100,000 on top of the 80 grand. As he was trying to figure that out, well, he got hit with another $20,000 bill, effectively making his $80,000 order cost him $200,000. Not a great day for that guy, let me tell you. And probably not a great day for a lot of you out there in the commerce world.
There's so much confusion. The reciprocal tariffs are already kind of paused. They're on this weird, weird runway. We don't know which way it's going. And you might be wondering, well, what do I do? Is there anything that you even can do? Which is what this video is all about: What can you do in the face of all of this uncertainty? And what does it mean when it comes to buying and selling a business during this kind of uncertain climate?
As of the making of this video, a little bit over a week ago, Trump came up with the big, beautiful billboard of all the reciprocal tariffs that he is going to charge. And none of those reciprocal tariffs really made a lot of sense because the tariffs he's charging are not actually related to tariffs at all. So it's quite confusing. The reciprocal nature of it is also confusing. Probably proportional tariffs might have made more sense from a marketing standpoint to make this less chaotic, but it is what it is.
So, as that rolled out, the entire world went into shock. About 70 or 75 countries reached out to America to try to negotiate this trade deal or just to ask what is happening. No country did any retaliatory tariffs on America in the face of this, except for China, which came out with a reciprocal tariff. After that, Trump paused all reciprocal tariffs, except for the base 10%, except for China, which increased their tariffs. They went back and forth tit for tat for a little bit. At least at the time of this recording, China is charging America—I think it's 125% on all American imports that they're doing, and America is charging them 145% on basically everything that they’ve got going on. China just announced that they're no longer buying Boeing equipment, and they are also banning some rare earth materials from being exported out to America. So, very fun times—a lot of chaos, a lot of blood in the streets that are going on.
If I was to make a prediction, which, who knows what's going to happen with all this, my guess is long term what we would see is going to be a 10% kind of universal tariff for all imports coming into America going forward. Now, that could be completely wrong. It's just I've been deep in the weeds on all the think tanks when it comes to tariffs. There's a good dude named Oren Cass—he makes a very strong case as to why 10% would make sense as kind of the universal rollout. Scott Besant, who is the Secretary of Treasury, also has mentioned in so many words about a 10% universal tariff too. So even if this goes away, I think we're still looking at probably a 10% tariff of some sort for the vast majority of goods that are going to come into America. That is, unless your name is China. And then, who knows what’s going to happen there. That is a hot spot, pricey one, and the two countries are fighting each other out pretty rough, which leaves us as entrepreneurs kind of like, what do we do, right?
So with that said, if I was going to be a betting man long term as an e-commerce entrepreneur, I'd be betting on at least 10% tariffs. And really, you should be factoring in 10 to 20%, because I think that's going to be kind of the range where things might settle down. After this 90-day pause, we'll see what happens. I don't think 90 days is probably long enough for any real trade agreements to be made, though maybe it will happen. But I would recommend that you should do some stuff right now.
If you're an e-commerce entrepreneur going through this chaos, there's not a whole lot you can do, but there are a few things you can do. So let's touch on what you can do right now to try to shield yourself from the worst blows of these tariffs that are coming out.
It makes sense to talk about the big elephant in the room. At Empire Flippers, we have sold well over 600 e-commerce stores at this point. We've sold over 2,000 businesses, and a lot of them—I would say most of them—get their products from China, and that's the big elephant in the room.
If you are an e-commerce entrepreneur currently getting your supply chain—all your goods—from China, I think you're in for a very, very hard road if you stay in that lane, maybe even an impossible road. At least right now, at 145% tariffs, the amount of additional money you'd have to charge and the margins that you'd have to squeeze are not tenable in my view. I think a lot of e-commerce stores are probably going to die that cannot get away from China. Hopefully that won't be you.
But if you are manufacturing in China right now, the number one thing you need to do—at least for now, like maybe this all passes by and you can come back to your awesome Chinese factories down the road—but at least for now, your number one priority is: how do I not get my goods from China at this point?
As for you e-commerce entrepreneurs who already have diversified your supply chain—maybe COVID taught you a good lesson that supplier diversification doesn't mean five factories in China, since the Shanghai port can shut down and you basically have no factories anyways—in that case, for those who are manufacturing in, say, Mexico, India, Vietnam, any of those kind of places, you're in a much better position. You can at least still run your business, even though these tariffs are probably still affecting you in a meaningful way.
What I would recommend for you during this 90-day pause is that you do what Apple is doing—maybe not as aggressively, but if you haven't heard, Apple is basically flying out a crazy amount of iPhones, MacBooks, stuff like that on first-class planes out of India to stockpile it all in America before that 90-day tariff pause is unpaused. Who knows what's going to happen at the end of that 90 days? Like I said, anything might happen, right? What is true today probably won't be true tomorrow—that's kind of the assumption we have to go by.
So Apple has decided to stockpile as much of their inventory as they can. If those 90-day tariffs resume as the way they were initially pitched, at least Apple has a little bit of time to try to figure out something else to do. I would recommend you do the same. If you can fill up your 3PLs—I think Amazon just announced they're going to be limiting products, so you might not be able to use the Amazon warehouse for this—but if you can get a deal with a 3PL to allow you to overship in multiple months' worth of product, I would say now is a pretty good time.
In addition to that, I would also be looking: Can you get your suppliers from anywhere else outside of, say, Southeast Asia or India? Which brings me into my next point, which is a potentially tariff-free Canada and Mexico.
Out of all the countries that were on Trump's absolutely brutal reciprocal tariff billboard, there were two that were notably absent: Mexico and Canada. They didn't get any of these reciprocal tariffs at all. That tells me that I believe—even with the initial opening salvo of these tariffs really targeting Mexico and Canada before the big, big "slay the world board" came out on stage—I do think Mexico and Canada will most likely get the best deal out of anyone because they're America's neighbors, the biggest allies, biggest trading partners. It just makes sense that if you are trying to dominate and reshape the world order, you'd start in your own home area.
So I think Mexico and Canada will most likely be the most free of all these tariffs. They might still have a 10% reciprocal or something like that—who knows. But I think if anyone is going to get the lowest amount of tariffs outside of America, it will probably be Mexico and Canada.
Now, Canada has a little bit of a manufacturing industrial complex, but Mexico has really upped their ante over the last several years, especially in the northern Mexico region. With that said, you might be able to reshore or at least nearshore some of your product in those two countries.
The absolute best move you can do in a tariff-heavy world during all this trade war is if you can source it all in America. Now, for most of you, that will be impossible because America has mostly a pretty gutted manufacturing industry at this point. Maybe it'll come back, maybe this will work—who knows? I think one thing that the administration will have to think about is raw components and work-in-progress components: how do you tariff that stuff? Because if you're tariffing that, it might be really hard to make finished goods even if the factories do come back to America. So a lot remains to be seen what's going to happen there.
If you are able, though, to manufacture in America, that is probably going to be your safest bet. Again, most of you probably cannot, but it's worth looking—is there even a possibility to do it?
Of course, if you want the emergency option, the other thing you can do is just simply sell your e-commerce store. Obviously, there's not a whole lot we can do and plan around these tariffs right now, hence why my advice is very brief. Because, who knows what's going to happen, right? Everything is in flux. Everything is changing quite a lot.
But you might be wondering, what does this mean if I was trying to sell my e-commerce store? I have helped sell over 2,000 businesses now at Empire Flippers, and I can tell you, businesses get bought and sold in good climates—good economic climates—and really bad ones. I've been through both. At the start of COVID, it was not looking pretty. It looked like all the charts had fallen off the deep end. It was not a good look for pretty much anyone involved.
With that said, the one type of economy that M&A really slows down on is an uncertain economy. And right now, we're in a very uncertain economy. I would probably wager this is right up there, if not potentially even bigger than at the start of COVID with how much uncertainty is in the market. No one really knows what to do, and when no one knows what to do, a lot of people get paralyzed.
All this is to say, if you're trying to sell an e-commerce store today—to try to exit that brand—it might take a lot longer than normal. Right now, I think an average deal takes about 87 to 94 days from the moment that they list on our marketplace to the moment of exit. I wouldn't be surprised if that goes longer, if it goes up to even above 100 days to sell your brand at this point.
From this perspective, you as a seller really need to become a lot more flexible right now. The M&A market had started returning to normal before good old Trumpy shook everything up. That meant deals were getting done at a lower valuation than they were a few years ago during the whole COVID bubble that we had. But now, this has shaken things up even more, which means you as a seller will probably have to be a lot more flexible on what kind of deals you actually take in terms of taking lower amounts of money upfront or being a lot more flexible with what the buyer wants. You might need to come up with a deal structure that doesn't benefit you that much, but helps alleviate the risk in the buyer's mind.
Now, what I mean by this is, let's say you were selling an e-commerce store. You could actually proactively offer that buyer an earnout scenario where the earnout is based on the tariffs. Because we don't know what's coming down the road, you create an earnout structure that changes how much that buyer will be paying you over a period of time—every month, every quarter, or whatever. They'll still pay you the same amount overall, but they will adjust their monthly or quarterly debt payments to you based on how the tariffs play out. You could write into your earnout structure, like, "Hey, if it's a baseline 10%, this is what it is. If it's 0%, this is what it is. If it's 20%, this is how much you're going to be paying me." This way at least you can be on the buyer's side, because the buyer is taking all the risk at this point. It's far riskier in a lot of ways for a buyer to acquire an e-commerce store in this environment because it's a whirlwind out there.
So you can help alleviate some of that pressure and some of the risk that the buyer is feeling and still get a deal done if you proactively arrange the deal structure to be flexible and variable until these uncertain times pass—which they probably will. It'll probably pass in, you know, two to six months would be my guess. But that is still a significant amount of time, and a lot of things can happen during that period.
For buyers, if a seller gives you that kind of deal structure, one, good on them—like, that's a seller worth keeping, right? They're trying to make it work with you. But you are entering a much higher-risk zone as an e-commerce store buyer. Not saying you shouldn't do it; there are still opportunities out there. In fact, you might be able to get really good deals right now because of the chaos, because there will be sellers that are wanting to exit. But even in that earnout scenario, let's say the worst comes to pass, you're still out at least the money you put up front as your down payment on that e-commerce store.
So I would be more conservative with all of your estimates. Plan for these universal tariffs and plan for a little bit higher, and ideally be looking at e-commerce stores that have the ability to either do a near shore in a Mexico setup, or maybe they even have the ability to manufacture domestically inside of the United States. That would be my advice there.
Or, of course, as a buyer, you can always sign up for our platform and look at non-e-commerce stores because we have a bunch of them. We have SaaS businesses, we have newsletters, we have digital products—you name it. E-commerce is definitely something we sell a lot of, but it is not the only thing out there. So maybe what you do as a buyer for a time is you change up your criteria of what kind of businesses you are going to acquire.
Either way, there are always opportunities in these chaotic and uncertain times, but with those opportunities come risk. So I would recommend you just keep a more conservative mindset with what you're doing and what your plans are.
With that said, go enjoy your tariff time. It is an uncertain world at this point. I do think the storm will pass—most of these storms do pass—but it might be a few months of blood in the streets until that happens. So on that extremely positive note, I'll see you in the next video. And make sure if you haven't done it yet, sign up for our marketplace at empireflippers.com and I'll see what you buy the next time. See you soon.
