If you’re operating a DTC brand in 2025, you’re likely not asking if tariffs affect you — you’re figuring out how much and how fast you need to adapt.
As of today April 9, 2025, the U.S. has imposed a 125% tariff on all Chinese imports. Most other countries, including the E.U. and most Latin American nations, have returned to a universal 10% rate following the rollback of originally proposed hikes. Mexico and Canada are exempt from the 10%, but most goods coming from those countries will still face a 25% tariff, unless they comply fully with the US-Mexico-Canada Agreement (USMCA).
Even if you’re not sourcing from China, the volatility in trade policy, shipping behavior, and competitors’ pricing strategy is already influencing customer behavior, ad cost and conversions.
Obviously this is a very fluid situation, but this is what we know now, what we’re seeing unfold, and our take on how to respond.
What Is “Landed Cost” and Why It Matters
Before we talk strategies, let’s talk about landed costs (skip if you know this already).
Landed cost is the total cost to bring a product into your fulfillment center. It includes the price you pay the supplier, tariffs, shipping, insurance, and fees.
This number — not your supplier quote — is what determines your real margin.
If your landed cost used to be $10 and is now $22.50 because of a 125% tariff, your margin disappears unless you take action. Even if you’re only seeing a 10% increase, your margin stack still shrinks, especially when combined with increased freight and fulfillment costs.
How DTC Brands ARE RespondING Right Now
1. Reevaluate COGS and Price Strategically
Not everything needs a price hike — but some SKUs likely do and brands are considering price increases with their next inventory order. I would refrain from site wide increases. Start with your top sellers that are affected by tariffs or shipping increases (IF, and only if, your supply chain and/or specific SKUs are directly impacted). Incremental and targeted increases of 3–7%, especially when combined with better bundling or free shipping thresholds, are more tolerable than expected.
Low performers or price-sensitive products, on the other hand, might not tolerate increases and should be reviewed case by case.
Why focus on best sellers?
Because customers are already buying them, they have proven pricing power, and small changes here can move the needle significantly without hurting conversion.
Keep in mind: customers may be already seeing rising prices or relative messaging. Transparency + value framing beats surprise increases every time.
2. Strengthen Supply Chain flexibility
You don’t have to switch everything overnight. But this is the moment to build sourcing and warehouse agility:
• Mexico and Canada (USMCA-compliant): Zero tariff—for now.
• Mexico and Canada (non-compliant): Still facing 25%
• Colombia, Peru, Guatemala, E.U., Vietnam and the rest: Currently at 10%
Explore dual sourcing for critical SKUs — especially if you’re all-in on a single country or factory. Basically, consider diversifying your risk. Even a partial shift can reduce exposure, improve lead times, and soften cost swings.
3. Adjust messaging — Do not panic
Urgency messaging is tempting. And a few hours in, I had already seen a couple of ads using copy like: “Secure your faves before prices go up”.
These are valid tactics, when used transparently, but they can also backfire.
Urgency can’t be your whole message. And I expect customer behavior to be more reactive, skeptical, and research-driven than ever. Price changes without the appropriate framing, may trigger bad sentiment, consideration delays, lower Conversion rates and higher CAC.
If you’re truly impacted, be extremely transparent using plain text emails to explain how this is impacting your business and your prices.
• “We’re holding prices steady where we can — here’s how”
• “We’re doing everything we can to keep prices steady”
• “We locked in early inventory so you still get our best price”
And more importantly convey value and ask your customers for feedback.
Urgency is powerful. But trust is stronger.
What This Means for Meta and Google Ads
We can’t predict the exact effect of these tariffs on Meta or Google Ads performance, but we can tell you this:
The volatility will show up in your numbers.
• As brands update pricing, urgency, and offer strategy, CPMs will fluctuate.
• CAC is likely to trend upward, especially in verticals where tariff exposure is high.
• AOV and Conversion Rate may fluctuate as well.
You don’t need to pull back ad spend. But you should:
• Monitor CAC at the SKU and creative level
• Have value-driven creative (alongside urgency-based offers)
• Bring value with bundles that are relevant to your customer’s persona
• Consider how shipping delays, cost increases, and promo fatigue might be hitting your funnel.
• Keep an eye on customer sentiment (read those comments!)
What Agencies, Brands and Operators Should Be Doing Now
This is not a time for drastic overhauls. It’s a time for scenario planning and small but meaningful pivots.
• Run product-level margin audits — especially on SKUs exposed to China or subject to higher rates
• Model pricing increases surgically (aka Best Sellers), not across the board
• Review retention and post-purchase flows, not to rewrite, but to reinforce value, incorporate bounce-back offers before any major pricing shifts.
• Offer flexibility: consider adding payment options or loyalty credits to ease purchasing decisions
• Adjust your advertising goals as you go
Consider that…
This is a window. A 90-day pause for most countries—maybe. A 125% penalty for those sourcing from China. A shifting baseline for everyone else.
The strongest DTC brands this year won’t be the ones that shout the loudest.
They’ll be the ones who:
• Audit their exposure
• Adapt intentionally
• Communicate clearly
• And stay nimble through every twist
We’re working with brands daily to map this out in real time and check our options: pricing strategies, sourcing plays, creative pivots. If you need a strategy partner who can navigate the noise, we’re here for that.