How the US Tariff Policy Changes Impact International Businesses (And How to Navigate Them in 2025)

Disclaimer: This article contains time-sensitive information based on US trade policy developments as of April 2025. Tariff regulations and international trade dynamics may change rapidly. Readers are encouraged to consult with legal, tax, or compliance professionals for the most up-to-date guidance relevant to their business.

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“US to Increase Tariffs on EV Batteries, Semiconductors, and Medical Equipment from China by 2025.” — BBC News, April 2025.

If you run a global business and that headline made you do a double take, you’re not alone. 

With new reciprocal tariffs, shifting trade alliances, and fluctuating customs regulations, 2025 has ushered in a new era of international commerce. For founders sourcing goods from overseas or selling into the US market, staying informed is crucial.

Today’s guide unpacks the key US tariff policy changes introduced under the Trump administration and gives international founders a strategic playbook to adapt fast, optimize smarter, and stay ahead of compliance.

And if you’re looking for a trusted partner in the US to help navigate it all, you have doola as your all-in-one strategic guide for formation, compliance, and financial clarity.

What’s New in 2025: A Snapshot of US Tariff Policy Changes

This year’s US tariff policy changes under the Trump administration are a fundamental recalibration of how the US engages in global commerce. 

Sparked by growing pressure to protect domestic industries and recalibrate global trade deficits, particularly with China, 2025’s new tariff framework marks a sharp pivot toward strategic retaliation, selective diplomacy, and future-facing industry protection.

But what set the stage for these sweeping tariff policy shifts?

The US goods trade deficit hit a record-breaking $1.2 trillion in 2024, with China accounting for over 35% of that imbalance. 

The 2025 policy refresh, formalized via an April Executive Order, is designed to create “reciprocal fairness” while reinforcing US innovation hubs in sectors like clean energy and AI-powered tech.

Here are the core updates that every global founder should have on their radar:

1. Reciprocal Tariff Enforcement

Under the 2025 Executive Order, the US now mirrors the tariff rates imposed on American goods by other nations. So, if a country hits U.S. exports with a 20% tariff, the U.S. slaps back with a 20% tariff on imports from that country in the same category.

Implications for International Businesses:

If you’re a founder sourcing US components for manufacturing or selling to the US from countries like Brazil, India, or Vietnam, you could now face tariff parity pricing pressure. 

This may raise your total landed cost (TLC) by 8–22%, depending on your category and country of origin.

Example: A German robotics company importing $500,000 worth of American sensors may now pay an additional $100,000 in retaliatory duties if Germany enforces equivalent tariffs.

2. China-Specific Tariff Reinstatement

A selective reinstatement of Section 301 tariffs has zeroed in on high-impact Chinese exports, especially in strategic tech and health sectors.

Products affected include:

• EVs and lithium-ion battery packs

• Photovoltaic solar components

• Class II and III medical devices (e.g., surgical robotics, MRI tech)

Implications for International Businesses:

Founders sourcing from China in these categories now face tariffs up to 35%, significantly impacting cost models and go-to-market pricing strategies.

Example: A Singapore-based solar panel e-commerce brand importing Chinese solar inverters at $2M annually will now face a cost jump by $600,000 overnight, forcing a full supply chain pivot to South Korea or neighboring countries.

3. Temporary Suspension for Allies

A 90-day suspension of tariffs has been granted to strategic allies including Canada, the EU, South Korea, and Japan—excluding China. This is designed to realign diplomatic and economic partnerships amid rising global tensions.

Implications for International Businesses:

This short-term window presents a rare arbitrage opportunity for global founders to reroute sourcing through exempt countries. For example, a founder in France sourcing tech from Taiwan could drop-ship through Germany to temporarily dodge Section 301 duties.

📌 doola’s Tip For the do’ers: Leverage free trade agreements (FTAs) with EU countries to restructure your distribution model, using EU-based warehousing or co-packaging facilities.

Which Industries Are Hit the Hardest?

Here’s a quick breakdown of the sectors feeling the full weight of the 2025 tariffs and what that could mean for your business model:

Industry	Tariff Spike	Main Countries Affected	Business Impact
EV Parts & Batteries	20–35%	China, South Korea	Price hikes, R&D delays, longer lead times
Consumer Tech	12–25%	China, Vietnam	Higher cost of goods sold (COGS), need to renegotiate wholesale contracts
Apparel & Textiles	8–15%	Bangladesh, India, China	Shrinking profit margins, re-sourcing urgency
Medical Equipment	18–30%	China, Taiwan	Regulatory bottlenecks, risk of non-compliance

Bottom Line: It’s Not Just About Goods Anymore

According to EY Global Tax News, the USTR has expanded tariff classifications to include digital-hardware hybrids, meaning software-as-a-service (SaaS) providers that integrate physical components—like smart wearables or IoT devices—could be pulled into the tariff dragnet.

What this means for you:

The line between “digital” and “physical” is blurrier than ever and global founders who miss that are already paying the price.

So, for example, if you’re a London-based SaaS founder shipping sleek smart fitness trackers into the US, you’re not just selling gadgets anymore. You’re now juggling dual customs classifications: one for the hardware, another for the embedded software modules. 

And if your business involves cross-border software updates linked to a physical product (e.g., firmware patches, device syncing, hybrid service models) you’ll be classified as a full-fledged importer. 

Even if you never ship a single box, the system may treat you like you do.

Let’s explore how the US tariff policy changes are playing out, from budget blowups to restructured supply chains, and how founders like you are adjusting in real time.

The Real-World Impact on International Businesses

The US tariff policy changes in 2025 are already shaking up supply chains, pricing models, and go-to-market strategies across borders. 

Let’s zoom into two real-world scenarios where companies got hit with the impact of these policy shifts.

Case #1: The Singaporean SaaS Startup That Hit a Hardware Wall

Industry: IoT + SaaS

Tariff Zone: 10% hardware component tariff (Section 301 reinstatement)

Impact:

A fast-growing SaaS startup in Singapore had just begun scaling its smart home analytics platform in the US. They bundled IoT sensors with their subscription, giving customers real-time home data. 

But their sleek sensors were built with parts sourced from China.

With the 10% component tariff now reinstated, every sensor unit costs more to ship. Here’s a breakdown of the costs incurred.

Cost Breakdown (Per Unit)	Pre-Tariff	Post-Tariff
Sensor component cost	$18.00	$18.00
Customs + shipping fees	$2.50	$3.20
Tariff (10%)	$0.00	$1.80
Total Landed Cost	$20.50	$23.00

That’s a 12.2% increase in cost per unit, and when you’re shipping 10,000 units/month, that’s a $25,000+ monthly hit. 

Case #2: The German DTC Brand Losing Its Margins

A German apparel brand using Chinese suppliers saw shipping costs surge by 12% due to added tariffs and longer customs checks.

Industry: Apparel & E-Commerce

Tariff Zone: Textiles and apparel from China

Impact:

A trendsetting DTC fashion brand based in Berlin was thriving in the US market, until they got caught in the middle of tariff escalations. Their main suppliers in China were suddenly subjected to 25% tariffs on blended fabrics, zippers, and packaging materials.

Rather than raise prices (and risk losing Gen Z customers), the brand tried to absorb the blow. But the math didn’t lie:

Shipment Volume	Monthly (Pre-Tariff)	Monthly (Post-Tariff)
Units Shipped	15,000	15,000
Average Tariff Increase	0%	12%
Extra Costs	$0	$18,000+

Even worse, with customs bottlenecks adding 7–10 days of clearance, customer satisfaction scores dropped from 4.8 to 4.2. 

To cope, the brand began reassessing country-of-origin labels, experimenting with Vietnamese factories, and dealing with relabeling— all while trying to keep their influencer collabs on schedule.

Operational Challenges: What Businesses Must Now Prepare For

As seen in our case studies earlier, tariffs can hit even digital-first brands, especially those dependent on physical goods, IoT, or cross-border fulfillment. 

Let’s look at some of the key challenges businesses need to tackle.

1. Landed Costs Up by 5-15%

This isn’t just about tariffs. Customs processing, documentation requirements, fuel surcharges, and secondary supplier costs—all are stacking up.

So, businesses that don’t re-calculate unit economics now risk misquoting margins and overspending on logistics.

2. Reassess Country of Origin and Product Labeling

Many importers are now forced to switch suppliers or reclassify goods.

Example: Some textile imports from China are being re-routed through Vietnam or Bangladesh to avoid the 25% hike, raising questions about compliance and product origin traceability.

3. New Documentation Thresholds

Simple invoices aren’t enough post the US tariff policy changes. US Customs now wants:

• Detailed bills of materials (BOMs)

• Certificates of Origin (COOs)

• HTS classification accuracy confirmations

• Proof of non-Chinese origin for excluded goods

Bottom line, the US tariff policy changes in 2025 is a strategy reset. From sourcing and labeling to customer timelines and logistics playbooks, global businesses must now rethink everything.

📌 doola’s Tip For the do’ers: Not sure if your business is affected? Use the US Harmonized Tariff Schedule to look up your goods by classification.

Strategic Adjustments Businesses Can Make to Mitigate Risk

The 2025 US tariff policy changes have triggered massive shifts in how international business is done. 

Let’s break down how the best global businesses are future-proofing their operations right now.

1. Diversify Your Supplier Base 

Because your business literally depends on it. Over-reliance on a single country, especially China, is no longer efficient.

Here’s how to revisit and realign your strategy: 

• Build a multi-country sourcing map with fallback suppliers in Vietnam, India, Bangladesh, or Latin America.

• Negotiate MOUs in advance so you’re not scrambling mid-crisis.

• Use supplier scorecards to measure reliability, cost impact, and tariff exposure side-by-side.

Ultimately, when you have multiple suppliers in play, you’re not just protected from disruption, you’re positioned to negotiate stronger pricing every time.

2. Master the Art of Tariff Engineering

Tariff engineering is the strategic redesign, packaging, or classification of your product to qualify for lower-duty categories.

In the real world, this can look like:

• Adjusting material composition to shift HS code (e.g., 49% polyester vs. 51% cotton = major tariff difference)

• Changing assembly points (e.g., assembling in Mexico vs. importing fully built units from China)

• Packaging hacks (selling items as parts vs. whole sets)

Simply put, tariff engineering is your strategic lever to turn finance, legal, and operations complexity into competitive edge.

3. Establish US Warehousing Hubs

US-based warehousing doesn’t just cut delivery times; it smooths over customs bottlenecks and gives you better inventory control.

Here’s why top e-commerce entrepreneurs consider this as a strategic move:

• Pre-clear goods under Section 321 (for low-value shipments)

• Leverage bonded warehouses to delay duty payments until goods are sold

• Enable split-shipping for different state tax advantages

Additionally, this gives your brand the “domestic player” upgrade in the eyes of US customers.

4. Financial Planning with Smart Forecasting

Tariffs may be policy-driven, but the impact shows up right in your margins. Without proactive financial planning, what looks like a growth year can turn into a low-profit year real fast.

Here’s how the top players achieve it:

• Add a 10–20% margin buffer into your pricing to account for sudden duty hikes or port surcharges.

• Use currency hedging tools (especially for USD-CNY or EUR-USD transactions) to manage cost predictability.

• Bring in global-savvy partners such as customs brokers, international CPAs, and global tax advisors who actually know what they’re doing across borders.

And now, let’s find out what prominent global leaders have to say about the recent US tariff policy changes:

This isn’t just a quote, it’s a blueprint. Founders who win in 2025 are the ones treating tariff policy like product-market fit: something to master, not dodge.

That’s where doola steps in. We help global founders engineer smarter businesses built for compliance and ready to thrive in the face of any policy curve ball.

Formation & Compliance: Why It Matters More Than Ever

In 2025, smart global founders are treating US entity formation as a now-or-never move that unlocks banking, partners, tax strategy, and trust.

Let’s break it down for you.

Benefits of US Formation in 2025

In a market where supply chains are global but trust is local, having a US business entity is a business imperative. For global founders, it unlocks the following benefits across logistics, finance, and tax planning:

1. Unlock Premium US Partnerships

US-based logistics, distributors, and e-commerce platforms favor local entities for simpler contracts, faster onboarding, and reduced liability risk.

So here’s what you need:

• Qualify for US warehousing networks like Amazon FBA, 3PLs, and bonded zones

• Access same-day fulfillment, local returns, and shipping discounts

• Build trust instantly with domestic B2B partners and vendors

In simpler words, you’re no longer “international”; you’re “local with global roots.”

2. Access US Banking, Payment Gateways and Tools

Without a US business entity, accessing the necessary financial infrastructure becomes challenging, so here’s your next step:

• Open a US business bank account for stability and better interest rates.

• Set up Stripe, PayPal, and US-only fintech tools without restrictions.

Because eventually, payment processors trust US businesses more due to faster payouts and higher limits.

3. Establish Tax Nexus to Optimize Global Tax Strategy

Having a US entity gives you strategic control over where and how you’re taxed, here’s how:

• Leverage state-level tax advantages (e.g., Wyoming, Delaware)

• Separate personal and business liability (especially with an LLC or C Corp)

• Use your US entity as a tax treaty shield in global jurisdictions

Done right, this is your chance to structure your business on your terms. And now, let’s find out if you are ready for US business formation.

📝 Mini Checklist: Are You Formation-Ready for 2025?

Every serious global founder looking to scale in the US needs their formation fundamentals locked and loaded, and you should too.

Here’s an essential checklist as you gear up to play in the big leagues.

1. Registered US Entity

Establish your LLC or C Corp in a business-friendly state like Delaware, Wyoming, or Florida. These states offer benefits like fast processing, startup legal infrastructure, and credibility with US partners and VCs.

2. EIN (Employer Identification Number)

This is your business’s official ID, mandated by the IRS. Without it, you can’t run payroll, file taxes, or even open a US bank account.

3. US Business Bank Account

A US business bank account lets you collect payments in USD, integrate with platforms like Stripe and PayPal, and manage cash flow seamlessly.

4. Registered Agent & Operating Agreement

A registered agent keeps your company compliant with state notifications. Your Operating Agreement lays down the rules of engagement for founder alignment and legal protection.

5. Compliance Dashboard

Use smart tools (like doola) to keep tabs on filings, renewals, and tax deadlines.

Once these pillars are in place, you’ll operate with the confidence of a US-based founder. Let’s talk about the tools and advisors that’ll help you navigate what’s coming next.

Legal, Tax, and Documentation Implications

Tariffs are just one part of the regulatory domino effect. Here’s how the impact unfolds beyond “US tariff policy changes”.

Legal Implications:

Your product’s Harmonized System (HS) classification isn’t just a code; it determines duty rates, admissibility, and even whether your shipment gets flagged for inspection. So, accuracy here is non-negotiable. 

And if you’re scaling in industries prone to knockoffs (like electronics or fashion), you’ll need to double down on IP protection strategies to safeguard your brand from global counterfeits.

Tax Implications:

Cross-border logistics come with tax opportunities. However, many global founders overlook deductions for shipping, customs, and even warehousing costs.

And if you’re running a US-based LLC as a foreign owner, Form 5472 is an IRS mandate.

States may often layer in their own rules, like excise taxes or VAT-like fees that vary wildly based on product category and destination.

Documentation Aspects:

Customs wants clarity. This means, your commercial invoice must show the true value of goods, else you’ll face delays or penalties.

Then there’s the Certificate of Origin that can unlock tariff benefits under trade agreements, while updated labeling standards (especially for electronics and apparel) are critical. 

doola helps founders avoid all these regulatory hassles and keeps them audit-ready and tax-compliant. 

Book a demo to get started today.

Common Myths Global Founders Often Believe (And How to Avoid Them)

Too many founders sprint into the US market based on common myths, only to trip over compliance wires later.

Let’s dismantle those myths and show you what’s really at stake.

Myth #1: “Tariffs? We’re a digital business. Those don’t apply to us.”

Fact: If your product includes any physical component (e.g., sensors, smart devices, routers, wearables, plug-and-play kits) it will fall under hardware tariffs.

Even if your revenue model is 90% SaaS, the hardware you ship unlocks these compliance challenges:

• Physical shipments = Harmonized Tariff classification

• Delays at US Customs = churned customers, refund requests

• Tariff brackets = price hikes you didn’t budget for

And remember, digital-first doesn’t mean your business is tariff-proof. If your platform plugs into anything physical, you need a US import plan.

Myth #2: “I’ll just register any US entity and I’m good to go.”

Fact: Entity type isn’t a checkbox, it’s a whole strategy. Forming an LLC vs. a C Corporation impacts:

• How customs views your business during inspections

• Which tax treaties you can leverage internationally

• Whether you qualify for US investor incentives or payment partners

Not all states are equal either. Some come with stricter reporting rules, higher annual fees, or limitations for foreign founders. So select your entity wisely.

Myth #3: “Compliance? That’s just formation paperwork, right?”

Fact: Compliance is not just a checkbox to tick off. After formation, you’re accountable for:

• IRS filings even if you made $0 in revenue

• US bank account verification and transaction reviews

• Annual reports with the Secretary of State

• Ongoing license renewals for importing regulated goods

doola helps global founders dodge these pitfalls from day one and stay protected through every pivot, product launch, customs filing, and investor pitch.

Get started with doola’s Business-in-a-Box™ platform today!

Proactive Tools, Resources & Advisors for Staying Ahead

If you’re a global founder navigating tariff shocks, fluctuating shipping costs, and legal blind spots, you need a precision-built system of tools, partners, and data to make the right move.

Let’s show you how it’s done:

Intelligence Tools Every Global Founder Should Have on Speed Dial

This isn’t another generic list of tools. These are the exact platforms used by world-class operators to gain real-time clarity and a competitive edge.

1. Tariff Data Sources

Before tariffs hit your margins, pay attention to these websites:

• USTR.gov: Track official US trade policies, updates, and retaliatory tariffs straight from the source.

• CBP.gov: Access rulings, classification changes, and compliance enforcement news—before your competitors do.

And since tariffs don’t always come with a warning, these sites are your saviors.

2. Import Monitoring & Supply Chain Tools

Forecasting delays or sourcing shifts in real time? Pin these tools to your strategy board now:

• Flexport lets you visualize freight timelines, customs clearance risks, and landed cost projections in real time

• ImportYeti will spy on your competitors’ supply chain to see who they’re sourcing from and how often

• Jungle Scout optimizes product sourcing and profitability by tapping into Amazon trend data

This toolkit, essentially, is your global radar system— scanning for supply chain turbulence before it hits your business.

🚀 doola’s Global Growth Network: Your Strategic Allies

Scaling internationally takes more than great products; it demands a league of specialists who understand the terrain.

At doola, we don’t just form your business; we plug you into a high-trust ecosystem designed for global growth.

1. International Tax Experts

doola connects you with experts who help structure your global entities for maximum efficiency and minimum liability. From cross-border tax planning to entity optimization, every move is made with your bottom line in mind. 

2. Global Banking and Payment Partners

With doola, opening a US business bank account is hassle-free. You get seamless access to multi-currency support and unlock Stripe, PayPal, and other fintech tools that are usually off-limits to non-US entities.

3. Cross-Border Legal Advisors

doola’s legal partners help you stay compliant with evolving US import/export regulations, while ensuring your contracts, customs disclosures, and IP protections are rock-solid. 

And while most platforms leave you at formation, doola walks with you through every fiscal quarter. 

Book a demo and tap into doola’s global founder ecosystem today.

Simplify Global Formation and Compliance With doola

doola is built for ambitious founders, by people who get the global hustle.

We know formation isn’t just about checking boxes; it’s about building real infrastructure for scale. And ongoing compliance is the engine quietly powering every strategic move, investor pitch, and international expansion. 

And the founders who’ll dominate in 2025 will treat formation as infrastructure and compliance as capital. 

doola is ready to help them scale. From US formation and EIN issuance to banking, tax, legal, and customs guidance, doola brings it all under one roof. 

You also get a real-time compliance dashboard that keeps you audit-ready and stress-free. Because while tariffs and policies may change overnight, your operational foundation shouldn’t flinch.

Let’s build your US foundation right, so nothing slows you down when it’s time to go global.

Book a demo to get started today!

FAQs

Do US tariffs affect service-based businesses?

Yes, especially if your services involve physical products, hardware, or cloud infrastructure imported from other countries.

Can I form a US company if I live in [X country]?

Absolutely. With doola, you can form a US company from anywhere in the world.

How does formation help with trade or customs?

Formation gives you access to local warehousing, payment systems, US clients, and potentially lower compliance costs.

What’s the timeline for setting up with doola?

Founders can get set up in as little as 1-2 weeks.

Do I need to be in the US to benefit from these changes?

No. Many global founders operate remotely and use doola to handle US formation and compliance.