TikTok Creators Brush Off Trade War Fears Amid De Minimis Exemption Changes
The escalating trade war between the US and China has sent shockwaves through the global economy, with the latest development being the removal of the de minimis exemption. This little-known rule allowed packages worth less than $800 to enter the US tax-free, but its elimination could have significant implications for e-commerce platforms like TikTok Shop, Shein, and Temu. Despite the uncertainty, creators like Jenna Libman, who showcases affordable fashion items on TikTok, remain unfazed.
“I think this is so temporary and it’s not the time to pivot or freak out yet,” Libman told Mashable. “In this business, if you’re not prepared for ups and downs, you’re in the wrong business.” With over 500,000 sellers on TikTok Shop in 2024, the platform’s business model relies heavily on ultra-low-cost imports. However, the new tariffs, which could reach as high as 245% for Chinese goods, may force sellers to increase prices, potentially affecting the platform’s popularity.
The de minimis exemption, which was slashed by President Trump, has far-reaching consequences. According to US Customs and Border Protection, 4 million shipments enter the US daily under this exemption, with 90% of all packages falling under this category. The removal of this exemption could cost Americans between $11 billion and $13 billion, disproportionately affecting lower-income and minority households.
TikTok Shop creators, who earn commissions by promoting products, are also affected by the changes. While some creators, like Ash, are not too worried about the impact on their job stability, others may need to rethink their pricing strategies. “Tariffs on platforms like TikTok Shop don’t just impact product pricing, they ripple through the entire creator economy,” said Captiv8 Co-Founder and CEO Krishna Subramanian.
As the trade war continues to unfold, the creator economy is likely to shift. With brands potentially leaning into influencer partnerships, creators may see more revenue from brand deals. However, the moral implications of promoting impulse buys during an economic downturn are not lost on creators like Ash, who has decided to limit her TikTok Shop posts to avoid pressuring her audience into making unnecessary purchases.
While the future of TikTok Shop and the creator economy remains uncertain, one thing is clear: the removal of the de minimis exemption has significant implications for the global economy. As the world navigates this new landscape, creators, brands, and consumers alike will need to adapt to the changing tides of e-commerce.
