[ BDSN ] Trump tariffs struck down + loophole

👀 TRUMP TARIFFS STRUCK DOWN + LOOPHOLE BACK-IP

On May 28, 2025, the U.S. Court of International Trade unanimously struck down former President Trump’s sweeping tariffs on dozens of countries, declaring they exceeded presidential authority under the International Emergency Economic Powers Act (IEEPA). Read the original legal opinion here.

These tariffs included:

• 10-25% duties on Canadian and Mexican products (trafficking tariffs)

• 20% on Chinese goods tied to drug trafficking claims + 10% retaliatory tariff

• A 10% blanket tariff on all trading partners due to trade deficits

• And paused “reciprocal” tariffs (20%–50%) on other countries set for July 9

The court ruled the emergency powers law doesn’t allow tariffs as open-ended economic weapons, dealing a major blow to one of Trump’s core trade strategies.

💸 Tariff Payments Could Be Refunded

Importers may be eligible for refunds on previously paid duties. The DOJ has filed an appeal, but for now, sellers are seeing the light at the end of the tariff tunnel.

🧠 Smart Sellers Already Found a Legal Workaround — and it’s Saving Them Big

Even before this ruling, savvy sellers were using a legal tariff loophole called the “first sale rule” to reduce duty costs — and it’s gaining traction fast.

The First Sale Rule officially went into effect in 1988, and it’s been part of U.S. Customs law ever since.

The rule stems from a 1988 decision by the U.S. Court of International Trade in the case of Nissho Iwai American Corp. v. United States. The court ruled that when goods are sold multiple times before being imported into the U.S., importers can calculate duty based on the price of the first sale.

This case set the precedent and U.S. Customs and Border Protection (CBP) codified the rule in its regulations

How It Works:
Let’s say a factory in China sells a t-shirt to a Vietnamese distributor for $5, who resells it to you (the U.S. importer) for $10. If you document that first sale properly, you can pay duties based on the $5, not the $10.

✅ Perfectly legal
✅ Huge savings
✅ Especially useful for high-margin goods

Big names like Moncler, Traeger, and biotech firms like Kuros Biosciences are already using it to slash costs. Consultants say the rule is “exploding in interest” as sellers look for any edge against rising costs.

🧾 Criteria to Use It:

• There must be two or more arms-length sales

• Goods must be destined for the U.S. (not coincidental arrivals)

• You need solid documentation of that first factory sale

• Your suppliers must be willing to disclose the original invoice price

⚠️ Why This Matters Now:

• If the ruling holds, tariffs could be reduced further or disappear — cutting costs instantly.

• If the ruling is overturned, first sale rule becomes your best legal backup for now.

📲 SOCIAL COMMERCE NOW POWERS 1 in 5 ONLINE SALES

Social commerce is no longer just a trend—it's becoming the way people shop.

🛍️ As of 2025, social networks drive 17.11% of total global e-commerce sales, with projections showing that figure rising steadily through 2029. By some estimates, social commerce already accounts for 20% of all e-commerce worldwide.

🌎 Top adopters? Thailand, Colombia, and China lead the way—with 9 out of 10 internet users in those countries making purchases directly from social media platform

📈 Global revenue from social commerce hit nearly $700 billion in 2024, up 23% year-over-year.

🎥 Live Shopping = The Future
Platforms like Facebook and TikTok are fueling the next phase of this evolution through live commerce. In regions like China, India, Thailand, and the UAE, over 70% of online shoppers now participate in livestream buying events—driven by exclusive deals, instant product education, and the thrill of real-time interaction.

🚨If your brand isn’t selling on social, you’re leaving money on the table.

🔭 YOU GOTTA SEE THIS

🚢  LLMs are RESHAPING ECOM and PRODUCT DISCOVERY

ChatGPT is transforming how consumers discover and purchase products online. Recent data from Fairing's Q1 2025 benchmarks reveals a significant shift in consumer behavior:

• ChatGPT leads LLM-driven discovery, accounting for 64.6% of all LLM-attributed transactions.

• The percentage of brands reporting at least one customer mentioning an LLM in their attribution surveys has grown to 11.8%, up from less than 1% a year ago.

ChatGPT Traffic Outperforms Traditional Channels

Warren Jolly, CEO of adQuadrant, shared compelling data on LinkedIn highlighting the effectiveness of ChatGPT as a traffic source:

• 4.2% conversion rate from ChatGPT traffic, 112% higher than traditional channels.

• $130 average order value, $30 above their standard AOV.

• $5.57 revenue per session, with users spending 60% less time on-site.

• These results were achieved without any optimization or feed management, indicating that users arriving via ChatGPT are highly intent-driven and ready to purchase.

The data suggests that LLMs are not just another traffic source but a fundamentally different channel that captures high-intent shoppers. Consumers are making purchase decisions within the AI environment, using tools like ChatGPT for product discovery and comparison, and visiting websites primarily to complete transactions.

Actionable Steps:

• Monitor LLM Traffic: Use analytics tools to track referrals from LLMs.

• Optimize for AI Discovery: Ensure your product data is accessible and well-structured to be effectively indexed by AI platforms.

• Adapt Attribution Models: Recognize the role of LLMs in the customer journey and adjust your attribution strategies accordingly.
  

COUNTERPOINT STUDY on LLM EFFECTIVENESS at DRIVING SALES:

A recent study by the SALT agency explores whether users arriving at websites via large language models (LLMs) like ChatGPT and Perplexity exhibit higher intent compared to traditional organic search visitors.

Analyzing over 188 million organic sessions and 671,000 LLM-driven sessions from January to March 2025, the study assessed engagement through a metric called Key Event Conversion Rate (KECVR).

Key Findings:

• Overall Performance: Organic search traffic generally outperformed LLM referrals in driving key events.

• Sector Variations: Certain sectors, such as Health (13.24% LLM vs. 12.88% organic), Careers (22.31% LLM vs. 16.58% organic), and Catalog Websites (2.34% LLM vs. 2.13% organic), saw LLM traffic with higher KECVRs than organic traffic.

• E-commerce Insights: In Consumer E-commerce, LLM traffic lagged significantly behind organic (7.14% vs. 24.12%), indicating that traditional SEO remains more effective for transactional conversions.

• SaaS Sector: LLM and organic traffic performed nearly identically in the SaaS sector (6.69% vs. 6.71%), suggesting that LLMs can be a viable traffic source alongside traditional search.

Implications for E-commerce:

While LLMs are emerging as a new referral source, their effectiveness varies by sector according to the SALT study.

For e-commerce businesses, especially those focused on direct transactions, traditional SEO continues to be crucial. However, LLMs may offer value in providing educational content or pre-purchase guidance.

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🚚  WALMART NOW ALLOWS AMAZON TO FULFILL ORDERS

Walmart just flipped the script. For the first time ever, sellers can now officially use Amazon Multi-Channel Fulfillment (MCF) to fulfill Walmart Marketplace orders — as long as they follow the new rules.

Here’s what you can do:

✅ Use Amazon's fulfillment network for Walmart orders
✅ Ship in neutral boxes (no Amazon logos)
✅ Use non-Amazon carriers only (like USPS, UPS, FedEx)
✅ Follow Walmart’s updated policy to avoid suspensions

But here’s what’s still prohibited:

⛔ No retail arbitrage (i.e., buying from Amazon to ship to Walmart customers)
⛔ No Amazon invoices, packing slips, or promo materials
⛔ No marking orders as “shipped” before they’ve actually left Amazon’s warehouse

✌🏼 Have a great weekend.

See you again on Monday.

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