Welcome back to the Funding Insider blog, where we discuss all things crowdfunding. Today, we’re going to take a look at a not-very-fun aspect of crowdfunding—tariffs! 

To recap, here’s a (very) brief overview of the recent tariff drama. The Trump administration’s “Liberation Day” tariffs saw an immediate escalation of tariffs on imports from China and a host of other countries. The initial 30% tariff on all Chinese goods took effect on May 15th, while the tariffs on remaining countries and a further 150% tariff on Chinese goods have been postponed to roughly August of this year.

Will Rewards Be More Expensive?

In short—yes.

What’s important to understand is that China makes everything. In the modern economy where most people are only really good at one thing, China takes this to a whole new level with manufacturing. Yes, China makes a lot of low quality products. But China also makes high end camera lenses, luxury car parts, designer clothes… Turns out, when one country in the world makes everything, they become very good at making things. And even if you do find something made in the USA, there’s no guarantee that the same thing couldn’t have been made in China better and cheaper.

So, chances are, we are not going to see a massive pivot to US manufacturing, and creators will largely continue to outsource their manufacturing to China. But even if a creator does create all of their goods in the US, the majority of their raw materials are going to be sourced from China, thus increasing the price anyway. So, even products made in the USA will be more expensive, causing lots of sticker shock for us when it comes to rewards pricing.

What About Shipping?

If you have a Kickstarter reward on its way, be prepared for hefty bill from customs. 

Typically, when we order from Amazon or other local vendor, we don’t expect such crazy shipping fees. But that’s because these platforms will subsidize some of the shipping costs themselves or increase the cost of the base item to prevent costly shipping fees. 

Unfortunately, small businesses just starting on Kickstarter don’t have the same power to subsidize tariffs that Amazon will have, and that’s part of the risk of doing business on Kickstarter. And unfortunately, Kickstarter creators likely won’t be able to tell you how much customs will charge you for your reward, as the bill will vary based on the total weight and category of the product. But you can ask the creator where your reward is being shipped from and where it was made to get a general idea of whether or not you can expect a big customs fee.

What Should We Do?

Unfortunately, the tariffs are going to impose real, steep costs on lots of goods. But to make things crazier is the greater overall uncertainty caused by the Trump administration constantly pushing new tariffs back. For instance, if I support a project now, will there be a 115% tariff by the time it ships next year? Or, if I’m a creator, if I move forward with fulfillment now, will there be tariffs in place by the time I get my raw materials? All of these are valid concerns that creators and backers alike are having.

If money is tight, our advice is to hold off until the White House gives actual guidance on what’s happening with the tariffs further down the line. After all, you don’t want to import a small product, only to discover that customs is charging you twice what you paid in tariffs. But, if you can afford the customs fees, feel free to go out there and support creators! Funding is tough in today’s economic climate, so your support will be much appreciated!