Will AliExpress survive Trump’s tariffs? Maybe! That’s the short answer, maybe. Probably. Let’s go with probably. That’s because of a couple important reasons that are going to arise thanks to the Trump Administration’s trade policies.
So to start with we should probably go over how AliExpress works. AliExpress works like ebay, where a bunch of primarily Chinese sellers offer a variety of products on the platform. When you purchase a product it almost always comes from China. Recently products that ship from the United States have been advertised by AliExpress.
And there lies the problem. Most products ship out of China. The Trump Administration plans harsh tariffs when it comes to China, supposedly up to 60%. And I’m betting there won’t be many, if any, exceptions to that tariff. And there’s no way Section 321 stays in place if tariffs are raised on Chinese imports.
Currently section 321 generally allows imports of products valued at less than $800 to pass through customs without duties. This is how AliExpress gets products into the United States without paying duties to the US Government. And there is just no way that is going to continue.
So you have double trouble… not only do tariffs shoot up to insane levels AliExpress and its sellers now have to comply with those tariffs which costs time and money. Duties on products coming into the United States are going to have to be paid. Products prices are going to rise to a ridiculous extent. Just how much is hard to say, but a simplistic view is that products will get at least 60% more expensive.
That price increase is going to hurt the impoverished disproportionally. AliExpress gave the impoverished a way to boost their spending power. They could get a number of goods at perhaps half of what they’d cost at Walmart, from socks to flashlights. I will say AliExpress’ selection sucks but it still provided some quality products. But the point is that AliExpress customers are going to be priced out from the platform.
And the impoverished aren’t the only customers they’ll lose. AliExpress will lose customers in general because who the heck wants to pay high prices for Chinese crap? Chinese crap is attractive because it’s ridiculously cheap. So AliExpress is going to lose a good chunk of customers in general.
So AliExpress has to comply with high tariffs, the loss of Section 321, and the loss of customers. So those are the problems.
But what good things does AliExpress have going on? Just like IKEA, AliExpress is global. Less than 7% of AliExpress users are American. That’s pretty dang good for AliExpress because more likely than not other countries like Brazil and Spain will not raise tariffs on Chinese products like the United States is doing.
That fact alone will keep AliExpress’ business out of bankruptcy and they may not even be hurt at all. Growth in other markets may make up for any losses in the United States.
Ultimately AliExpress is probably going to be fine despite the Trump Administration’s tariffs and the loss of Section 321. If you’re an American though prepare yourself for higher prices.
All statements regarding AliExpress are a matter of opinion. Only AliExpress should be relied upon for factual data regarding their financial health.