How Tariffs Affect Etsy Sellers & What You Can Do

For Etsy sellers, the global marketplace opens doors to customers in every corner of the world. However, evolving trade policies — particularly tariffs — can complicate international transactions. If you’re an Etsy seller wondering whether tariffs will impact your shop, we’re here to help. This guide will cover what tariffs are, how they affect Etsy sellers, and share strategies to tackle potential challenges.

For Etsy sellers, the global marketplace opens doors to customers in every corner of the world.

However, evolving trade policies — particularly tariffs — can complicate international transactions. If you’re an Etsy seller wondering whether tariffs will impact your shop, we’re here to help. This guide will cover what tariffs are, how they affect Etsy sellers, and share strategies to tackle potential challenges.

What Are Tariffs?

A tariff is a tax imposed on goods when they are imported into or exported from a country. Governments use tariffs to generate revenue, protect domestic industries from foreign competition, or influence trade relationships. Tariffs are typically calculated as a percentage of the item’s value, and they can vary depending on the product category and country of origin.

As an online seller, if you import products or raw materials from overseas, you may be required to pay tariffs upon entry into your country.

Most Etsy sellers won’t run into tariffs often, thanks to the de minimis exemption. This exemption allows items below a certain value to bypass tariffs. For example, in the U.S., the de minimis threshold is $800, meaning most Etsy orders fall below this limit. However, policies differ by country and can change suddenly, so it’s important to stay informed.

Which Products Are Affected by Tariffs?

​As an Etsy seller, it’s important to be aware of U.S. tariffs that may affect the cost of materials and products you import for your business. Recent tariff implementations have targeted a variety of goods, including those commonly used by Etsy sellers.​

Here are some examples relevant to handmade sellers (as of April 2025):

Jewelry and Craft Supplies

• Natural or Cultured Pearls (HTS 7101): Subject to a 10% tariff on imports from China, Mexico, and Canada.​
• Silver Jewelry (HTS 7113.11): Imports from China, Mexico, and Canada face a 10% tariff.​
• Gold Necklaces and Chains (HTS 7113.19): These items incur a 10% tariff when imported from China, Mexico, and Canada.​
• Imitation Jewelry of Base Metal (HTS 7117.19): Imports from China, Mexico, and Canada are subject to a 10% tariff.​

Art Supplies and Materials

• Art supplies such as paints, brushes, and canvases imported from China, Mexico, and Canada are subject to a 10% tariff.​

Recent Tariff Increases

• China: As of February 4, 2025, the U.S. imposed an additional 10% tariff on all imports from China. ​
• Mexico and Canada: Effective February 4, 2025, a 25% tariff was imposed on all imports from Mexico and most goods from Canada, with Canadian energy resources subject to a reduced 10% tariff.

As you can see, these tariffs affect a broad range of products, including raw materials and finished goods relevant to Etsy sellers.

How Do Tariffs Impact Etsy Sellers?

Tariffs can create some real challenges for both buyers and sellers in international trade.

For buyers, added costs from tariffs often come as a surprise at delivery, which can lead to frustration, disputes, or even abandoned orders.

On the seller’s side, these higher costs can reduce demand, as buyers may think twice before completing their purchase.

Shipping can also get tricky, with delays at customs or confusion over tariff-related fees leading to negative experiences and potential refunds. And then there’s the issue of profit margins—if sellers can’t pass on these costs to buyers, they often have to absorb them, which can really eat into their bottom line.

It’s a balancing act, and navigating these hurdles is no small feat for global businesses.

Strategies for Etsy Sellers to Mitigate the Effects of Tariffs

The good news? There are practical ways to adapt to tariff challenges. Here’s a list of strategies for Etsy sellers to minimize the negative impact:

1. Understand Your Market’s Tariff Rules

Stay informed about tariff policies for every country you ship to. Bookmark official government or customs websites for updates specific to your product category. Tools like Etsy’s Seller Handbook (particularly the section on Navigating Evolving Global Tariff Policies) often share timely updates on changes affecting sellers.

2. Communicate Tariffs Upfront

Transparency breeds trust. Use your Etsy listings to inform customers if their purchase might be subject to additional tariffs or customs fees upon delivery. Consider including a note in your product descriptions or a shop FAQ.

3. Switch to Local Suppliers

If tariffs on imported raw materials or finished goods are starting to cutting into your profits, consider local sourcing. Domestic suppliers may provide comparable quality without the hidden costs of international trade.

4. Adjust Pricing Strategically

To account for potential tariff-related costs, update your pricing. Test incremental price changes to see what your buyers are willing to pay while maintaining healthy profit margins.

Ensure you are using an inventory system like Craftybase that uses cost averaging and real-time updates to ensure that changes in pricing do not affect your current margins.

See also:

• How to Price your Product: The Ultimate Guide for Small Manufacturers →
• Pricing Mistakes (and how to avoid them) →

5. Diversify Your Offerings

Introduce digital products like art prints or patterns that are exempt from tariffs. This ensures you always have at least one revenue stream unaffected by trade taxes.

6. Offer Domestic Shipping Options

Limit international sales to minimize exposure to tariffs, focusing instead on strengthening domestic delivery. You can update your delivery profiles in Etsy’s Shop Manager to do this easily.

Accounting for Tariffs in Your Bookkeeping

Integrating tariff-related costs into your accounting process is crucial for accurate recordkeeping and tax efficiency. Here’s how to handle it:

If you aren’t using the COGS method: You’ll want to include your tariff costs in your overhead expenses.

If you are using the COGS method:

• Tariffs are part of what it costs you to get your inventory into sellable condition.
• You’ll want to add them to the landed cost of your products—this includes the product cost, shipping, insurance, customs fees, and tariffs.

As a quick example of a landed cost, let’s say I have a material that costs $10 to purchase. The shipping is $2 and the tariff is $1. My fully landed cost to get to me from the supplier is therefore $13.

This will ensure that your tariffs paid are factored directly into your inventory value and thus your COGS.

If you’re unsure about how to categorize your tariff costs, consult with a tax professional or accountant for guidance. It’s important to properly track and document these expenses for accurate financial reporting.

Also consider getting your bookkeeping on track with tools like Craftybase bookkeeping software, which integrates seamlessly with Etsy. It simplifies inventory tracking, COGS adjustments, and expense reporting—making it much easier to manage tariff-related complexities.

How Craftybase can Beat your Tariff Woes

Craftybase is a user-friendly bookkeeping + inventory software designed specifically for handmade and creative businesses. It offers a range of features that can help you navigate the complexities of tariffs, including:

• Accurate COGS calculations: Craftybase allows you to track your inventory costs accurately, taking into account any tariff expenses incurred. This means your COGS will reflect the true cost of each product sold, minimizing the impact on your profitability.
• Real-time pricing guidance: With the constantly changing nature of tariffs, it can be difficult to know how much to price your products. Craftybase’s real-time pricing guidance takes into account any additional costs from tariffs, giving you a more accurate idea of how much profit you will make on each sale.
• Automated tax reporting: Tax time can be a headache for many small business owners, but with Craftybase, you can generate detailed tax reports that include your tariff expenses. This will save you time and effort when it comes to filing your taxes.
• Better decision making: By having accurate and up-to-date information on your inventory costs, you can make more informed decisions about pricing, purchasing, and sourcing. This can ultimately lead to increased profitability for your business.
• Product categorization: Organizing your products into categories can help you quickly identify which items may be subject to tariffs and easily adjust their prices accordingly. Craftybase allows for easy product categorization, making it simple to manage tariff-related costs.

Start optimizing your inventory management and gain control over your tariff-related costs today. Sign up for Craftybase and enjoy a free 14-day trial—no commitment, no hassle. Take the first step toward smarter decisions and increased profitability. Start Your Free Trial Now →

Conclusion

Tariffs can have a significant impact on small businesses that rely on imported goods. As an Etsy seller, it’s important to stay informed about any changes in tariffs and how they may affect your business. By understanding the basics of tariffs and utilizing tools like Craftybase, you can better navigate these trade policies and keep your business financially healthy. Remember to always consult with professionals for specific advice on how to handle tariffs and maintain accurate financial records. With proper planning and management, your Etsy shop can continue to thrive despite tariff fluctuations. Happy selling!

Etsy Tariff FAQ

Is the De Minimis Rule suspended for the US?

As of April 2, 2025, the status of the U.S. de minimis rule has undergone several changes:​

Initial Suspension: On February 1, 2025, President Donald Trump signed executive orders imposing tariffs on imports from China, Mexico, and Canada. These orders also suspended the de minimis exemption for shipments originating from these countries, effective February 4, 2025. This exemption previously allowed duty-free entry for shipments valued under $800. ​

Temporary Reinstatement: On February 7, 2025, the suspension of the de minimis exemption was paused indefinitely to provide U.S. Customs and Border Protection (CBP) with additional time to implement necessary procedures for processing and collecting duties on low-value shipments. ​

Given these developments, the de minimis exemption remains in effect as of now. However, due to the evolving nature of trade policies, it’s advisable for businesses to stay informed about potential changes that could impact import procedures and costs.

Do I have to pay tariffs if I buy supplies from overseas through marketplaces like Alibaba or AliExpress?

Yes, even if you purchase through online marketplaces, you may be responsible for paying tariffs or import duties—especially if the shipment value exceeds the de minimis threshold or if the exemption is suspended. Always check the origin country and confirm who is responsible for duties (you or the supplier).​

Can I avoid tariffs by switching suppliers?

Yes, one common strategy is sourcing from countries with lower or no tariff rates. For example, suppliers based in countries with U.S. trade agreements may offer more favorable terms than those in China, Mexico, or Canada (depending on current policy).