Cheaper in China? Brands Navigate Tariff Whiplash and Consumer Confusion Amid Mixed Messages

Key Findings

‍Narratives have emerged suggesting that tariffs are prompting Americans to travel to China to avoid steep price hikes by shopping directly from the source. At the same time, targeted marketing on TikTok shows Chinese manufacturers actively courting American consumers with direct-to-buyer offers. Adding to the draw, China has introduced a new policy offering instant in-store VAT refunds and lowered the spending threshold for tax rebate eligibility—further enhancing its appeal as a global shopping destination.

‍Expiration of De Minimis Exemption: The US ended a duty-free exemption on low-value imports, primarily from China, which will likely lead to higher prices and delivery delays for consumers buying small parcels.  The De Minimis provision was introduced in 1938, under the Tariff Act of 1930. It was aimed to help businesses and trade and remove the administrative burden of collecting negligible duties on low-value goods at a high cost to the government. 

‍High Tariff Rates: The US has imposed tariffs as high as 145% on Chinese goods, while China's retaliatory tariffs on US goods have reached 125%.  

‍Increased Import Costs: The tariffs directly increase the cost for US companies to bring their China-made goods into the United States. These added costs will likely be passed on to consumers through price hikes to maintain profit margins. 

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Who It Affects

U.S. tariffs apply based on a product’s country of origin, not the brand’s nationality—so goods made in China face the same tariffs, whether imported by U.S. or Chinese firms. Combined with China’s VAT policies, this could impact consumer behaviour in the sector.

Electronics and home appliances: Midea, GE Appliances (now owned by Haier), Whirlpool, KitchenAid

‍Televisions and Displays: TCL and Hisense

‍Exemptions: As of April 2025, certain electronics like smartphones, computers, and semiconductors were excluded from the reciprocal 125% tariff.  But, a 20% tariff implemented in March 2025 still applies. Consumer electronics for brands like Xiaomi, Huawei, and smaller accessory manufacturers would be affected on non-exempted goods.

‍Clothes and footwear: Fast fashion retailers that heavily rely on Chinese manufacturing, such as SHEIN

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Why It Matters

‍Misinformation and disinformation risks: Brands being caught up in the disinformation playbook where actors game the confusion and chaos in the lack of clarity over new pricing structures.

• Targeted social media: Rivals can use popular platforms like Facebook, Instagram and TikTok to sow fake news and misleading campaigns.  Chinese actors could potentially spread fake news on platforms like Weibo and WeChat, as these are two of the most popular social media platforms in China. Other platforms like Douyin (short video platform), Xiaohongshu (lifestyle content), and QQ (instant messaging) could also be used, depending on the actor's target audience and the nature of the fake news being spread. 
• Overwhelming tax and refund information: Disinformation actors can take advantage of the lack of clarity of as VAT policies, tax refund information or tariff structure  - and that promotes confusing narratives, presenting risks to brands. 

‍Global Trade Uncertainty:  The trade war and tariff imposition have significantly strained the relationship between the United States and China, spilling over to other markets. The unpredictable nature of tariff policies creates uncertainty for businesses and investors worldwide, potentially leading to decreased investment and slower economic growth.

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Trends & Developments

Retailer Concerns: Major US retailers have reportedly cautioned President Trump about potential inventory shortages and the likelihood of increased consumer prices if the tariffs remain in effect.  

Economist Predictions: Some economists are warning of "empty shelves" in US stores and COVID-like shortages for consumers due to the disruption of supply chains. Predictions of a recession within the next 12 months have also been raised.  

Order Cancellations and Shipment Pauses: American businesses are reportedly cancelling orders from China and postponing expansion plans due to the uncertainty and higher costs associated with the tariffs. Some companies have paused shipments to reassess costs and trade strategies.  

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What We Anticipate & Opportunities

The situation is fluid, so brands caught in the crossfire of trade wars face a delicate balancing act to protect their reputation among consumers, partners, and investors. 

Faqcheck is an expert in monitoring trends like this across all platforms and offer these advice for brands to consider:

• Be Transparent: Clearly explain how tariffs and trade tensions affect pricing, supply, or sourcing—don’t hide the impact.
• Stay Neutral Yet Thoughtful: When speaking publicly, highlight economic impacts and call for fair trade without taking political sides.
• Give Context: Help customers understand why changes like price hikes are happening and that they stem from external forces.
• Keep Stakeholders Informed: Regularly update suppliers, distributors, and investors on risks and responses to maintain trust.
• Reinforce Brand Strength: Emphasise product quality and unique benefits to justify higher prices and retain brand loyalty.

Opportunities:

• Developing robust crisis communication strategies to counter misinformation.
• Investing in AI detection tools to identify and mitigate fake content.
• Engaging proactively with the media to prevent misinformation from taking root.
• Actively managing and engaging with online comments to protect brand image.

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