LVK CEO Maggie Barnett Offers Expert Insight on How Tariff Changes Will Disrupt E-Commerce Brands and Consumers
“It’s about the future of cross-border trade in North America.”
“The administration’s intent is clear,” says Maggie Barnett, CEO of LVK. “They want to boost American jobs and curb fentanyl imports via small parcels. This means the de minimis loophole—widely used by e-commerce businesses—has been broadly closed for imports from Canada, Mexico, and China.”
Key Insights for E-Commerce Brands:
- Over 25% of Shopify Plus stores rely on de minimis. The policy shift will trigger higher costs and cash flow constraints, putting pressure on small businesses and fast-fashion brands.
- Brands reliant on low or no tariff margins face existential threats, especially those unable to cover upfront tariff costs.
- The end of supply chain “optimization.”
“Optionality is the new optimization,” says Barnett. “The days of hyper-optimized, cost-minimized supply chains are over. Brands now need optionality to survive.”
What Brands Should Do Now:
- Diversify supply chains immediately. Import directly into the U.S. and partner with U.S.-based 3PLs to minimize tariff exposure.
- Diversify sourcing strategies. Shippers relying on de minimis must relocate inventory from affected countries to mitigate risks.
Broader Economic Impact:
- Canada and Mexico have announced retaliatory tariffs, potentially impacting the oil, auto, food, and energy sectors and raising costs for American consumers.
- The ripple effects could reshape USMCA negotiations and decelerate the growth of Canadian and Mexican e-commerce economies.
- “This isn’t just an e-commerce issue,” adds Barnett. “It’s about the future of cross-border trade in North America.”
