Changes and Future Plans Regarding Trump Tariffs
Dear customers and collaborators,
Many of you are likely aware of the renewed trade war initiated by the Trump administration. Our business has been deeply impacted by the current U.S. trade policies, forcing us to make adjustments to maintain a (relatively) smooth operation. These changes primarily affect our U.S. and Canadian customers, as well as international customers who prefer their orders to be shipped from the U.S.
In this article, we will outline the current situation, detailing how U.S. trade policies are affecting our operations and the steps we are taking to mitigate these impacts to the best of our ability. Given the volatility of the current administration’s policies, we cannot guarantee long-term solutions, and all plans discussed here are tentative. They may or may not be implemented, depending on future developments. While we will try to provide updates, please understand that sudden policy changes may require us to adapt quickly.
The Trump Tariffs
As a core part of Trump’s trade policy, the U.S. government introduced new tariffs on imports from Canada, Mexico, and China in February. These new tariffs add:
- A 25% additional tariff on all imports from Canada and Mexico
- A 10% additional tariff on all imports from China, in addition to the existing 0%-25% tariffs imposed during Trump’s first term
In March, an additional 10% tariff was imposed on Chinese imports, bringing the total penalty tariff rate on imports from China to 20%-45%, on top of regular tariffs.
Since most of our products are manufactured in China, these tariff increases significantly impact our import costs. Below is an overview of the new tariff rates on our major product categories:
| Product Category | Tariff Rate Prior to Feb 2025 | Tariff Rate As Of March 14, 2025 |
|---|---|---|
| Plush | 0% | 20% |
| T-Shirt | 18% | 38% |
| Kigu | 23.5% | 43.5% |
| Dakimakura | 11.4% | 31.4% |
| Other small merchandise | 30%-40% | 50%-60% |
Additionally, our newer prints, including The Migratory Series and some upcoming designs, are printed in Canada and now face a 25% extra tariff.
Future tariff changes are expected to remain highly volatile, creating severe disruptions in our import planning. For example, our latest batch of Axel plushes shipped just before the February tariff hike. By the time they arrived at the U.S. port, we were subject to a 10% tariff, and we narrowly avoided an additional 10% tariff by just a few days. Due to this instability, we have suspended all import plans until the situation stabilizes.
Current Solution
Despite the rapidly escalating tariff war, the Trump administration has temporarily left the de minimis threshold unchanged for small personal imports. Although there was an attempt to suspend it, the plan was dropped after just one day—likely due to the high administrative costs of inspecting and taxing all cross-border parcels. As a result, parcels shipped directly from China to customers remain duty-free, provided their value is below $800 USD.
Under the current tariff structure, it is now cheaper to ship most products directly from China rather than using standard import channels, especially for customers on the U.S. East Coast.
Therefore, we have decided to offer our U.S. customers a "Shipping-From-China" option, similar to what we already provide for international customers. Due to the uncertainty of future tariff policies, some new products may be available exclusively through this shipping method.
To accommodate this shift, our newly opened factory in China has sufficient capacity to handle increased parcel volume. Additionally, our facility is located close to our courier’s export logistics hub, reducing shipping times to the U.S. to approximately 6-12 days.
Customers can expect shipping costs for smaller parcels (1 lb or less) to remain similar, while larger parcels will see a significant price increase, particularly for customers on the U.S. West Coast.
We will continue to ship products stored in our U.S. warehouse but encourage customers to choose the Shipping-From-China option whenever possible. This will help us reserve warehouse stock for locations where shipping from China is difficult, such as Alaska, Hawaii, Puerto Rico, Minor Outlying Islands, and military addresses.
Risks and Concerns
To be fair, the current tariff structure primarily harms U.S. businesses that rely on international supply chains while having no impact on foreign businesses that sell directly to U.S. customers via small parcel shipments. Ironically, this contradicts the administration’s stated goals. It wouldn’t be surprising if the Trump administration eventually imposes tariffs on small parcels once the necessary administrative infrastructure is in place. When that happens, shipping from China will no longer be a cheaper or more convenient alternative, and we will likely resume normal imports—but with increased prices to cover customs duties.
Additionally, as more businesses shift fulfillment to China to take advantage of the duty-free status for small parcels, we anticipate increased demand for air freight, leading to higher shipping costs. In fact, S.F. Express already announced a price increase for U.S. shipments on March 13 due to rising demand.
We will continue monitoring the situation and provide updates while striving to minimize the impact on your purchases.
Future Plans
We do not expect this trade war to end soon. We have considered relocating some production to Korea (where we already develop plushes) or Japan, but Trump has already begun threatening tariffs on both countries, with trade conflicts with the EU also looming.
Since plushes are our main product, one potential strategy is to ship plush “skins” to the U.S. for local stuffing, reducing both tariff and freight costs. However, these alternatives require significant investment and will likely lead to higher retail prices. Additionally, the shortage of skilled workers presents another challenge.
The reality is that almost everything is made in China for a reason. We rent our factory space in China for less than $1,000 per month, which is already on the higher end. In contrast, our U.S. warehouse in Los Angeles is less than one-fifth the size of our factory, yet costs $3,500 per month. With a $5,000 investment in China, we can acquire a laser cutter with auto-feeding conveyor belt and image recognition, and the manufacturer is located in the same town, available for on-site service within 12 hours.
It’s not that we don’t want to manufacture in the U.S.—we already stuff our dakimakura pillow inserts at a factory in LA-but that’s nearly the only feasible production step we can do domestically. Even then, the factory only handles stuffing; we still need to import the pillow sleeves. Amid these drastic policy changes, the current government's push to revitalize American manufacturing is understandable. But until the country rebuilds a proper supply chain, most businesses will have no choice but to rely on foreign production and bear the impact of tariffs.
However, because Pawprint Press has a large international customer base, we believe it would be unfair for them to bear the additional costs imposed by U.S. policies. Most other countries already require customers to pay import duties (e.g., EU VAT). Instead of raising product prices across the board, we may implement a U.S.-specific surcharge (or “Trump Charge” if you prefer) to offset the impact of these tariffs. This would require extensive modifications to our shipping system, and we will provide further details as we develop this plan.
Again, we truly appreciate your patience and support. We will closely monitor developments in trade policy and adapt accordingly, keeping you informed along the way.
Best Regards,
Pawprint Press