Accounting for Tariffs 2025: Considerations for Accountants

Trump's 2025 tariff policies fundamentally alter accounting practices for e-commerce clients. The universal 10% import tariff and targeted surcharges up to 145% on specific categories directly impact cost calculations, inventory valuation, and compliance reporting.

The suspension of de minimis exemptions for Chinese imports means previously duty-free packages under $800 now face substantial tariffs. This creates new complexities in landed cost tracking, COGS accuracy, and cross-border tax compliance for accounting practices.

This guide examines how tariff changes affect accounting workflows, the challenges facing e-commerce practices, and technical solutions for maintaining accuracy during this transition period.

Key Trade Tariff Updates: Latest info for Accounting Practices (May 2025)

As of May 2025, significant changes in U.S. trade policy have introduced new tariffs and adjustments that directly impact accounting practices, especially those dealing with e-commerce clients. Understanding these updates is crucial for accurate financial reporting and advising clients effectively.

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These changes have significant implications for accounting practices, particularly in areas such as cost accounting, inventory valuation, and compliance reporting.

What Are Trump’s Tariffs?

The Trump administration’s 2025 tariff agenda has fundamentally reshaped imports. Most notable is the flat 10% universal import tariff, which applies to a broad range of goods from all trading partners. On top of this, the administration has targeted specific categories, including steel, aluminum, electric vehicles, and semiconductors, with tariffs as high as 25%.

But the most volatile element in the current environment? Tariffs on Chinese goods.

Initially pegged at 145%, these were temporarily lowered to 30% in mid-May 2025, following a trade agreement between the U.S. and China. However, the reprieve is limited, both in duration and relief.

“A Huge Nightmare” - Why the 90-Day Pause Offers Little Clarity

“I thought I was going to lose an arm and a leg, and today I found out I am only losing two fingers,”
- Dan Turner, Owner, Turner Hydraulics (Bloomberg)

The temporary 90-day reduction offers just enough time for some businesses to clear existing inventory, but not enough to place, import, and distribute new stock. For many small and mid-sized e-commerce businesses, this uncertain window complicates planning and cash flow forecasting. It’s a bandage on a bullet wound, especially when new tariffs could snap back at any time.

Despite the headline reduction, 30% remains historically high, and most accounting clients will continue to feel the squeeze in their landed costs, pricing strategy, and profit margins.

The End of the De Minimis Loophole (for China & Hong Kong)

The de minimis rule allows low-value imports (under $800) to enter the U.S. without incurring duties or customs screening. It was originally designed in 1938 to speed up trade and reduce customs paperwork for minor imports.

But by 2025, this rule had become a massive loophole, especially for goods coming from China.

Thanks to booming e-commerce and dropshipping platforms, millions of small packages entered the U.S. daily under this threshold. Chinese exporters could avoid paying tariffs altogether, while U.S. retailers importing in bulk still had to pay full duties. This created an unfair cost advantage and made it difficult for U.S.-based sellers to compete on price.

Worse, the loophole also allowed illicit or dangerous goods like fentanyl precursors to bypass customs checks. This prompted bipartisan backlash and led to the rule’s partial repeal for shipments from China and Hong Kong.

Why Accountants Should Care

• Many e-commerce clients relied on this rule to keep costs low. Now those goods are subject to full import duties.
• The clients’ profit margins will shrink, and accountants need to adjust tax forecasting and cost accounting accordingly.
• Customs valuation and compliance requirements are becoming stricter, which raises the bar for accurate COGS reporting and audit readiness.

USPS vs. Commercial Carriers - A Split Decision

In a bid to soften the blow, the U.S. government introduced differential tariff rates based on how the shipment enters the country:

• USPS imports from China now face a 54% tariff.
• Commercial carriers like FedEx or UPS see a reduced 30% rate.

This adds another layer of complexity for e-commerce accountants: tariff liability now depends on the fulfillment route.

Why it matters for accountants:

• Accountants need to review not just what’s being imported, but how.
• Customs classification and shipping method now both influence the tariff rate.
• Accountants may need to collaborate more closely with logistics teams.

Universal Import Tariff (10%) Is Now Law

The blanket 10% tariff applies to most imported goods, regardless of origin. This includes many SKUs that were previously duty-free. This rule, in effect since April 5, 2025, is already driving up landed costs across industries.

Why it matters for accountants:

• Accountants need to review existing COGS assumptions and update pricing strategies with clients.
• Tax deductions for imports may shift, depending on how tariffs are recorded in the general ledger.
• Margin compression may affect revenue forecasts, which will impact cash flow modeling and P&L statements.

What Does This Mean for Accountants

Here are two accounting examples that show how the 2025 tariff changes impact cost of goods sold (COGS), landed cost, and ultimately, profitability.

They illustrate why e-commerce accountants need live COGS updates, accurate landed cost tracking, and automated tariff handling, especially for clients importing from Asia.

Smartwatch Importer from Shenzhen

Product: Budget smartwatches imported from China
Monthly volume: 2,000 units

Key Accounting Impact:

• COGS increases by 30% per unit.
• Sellers must raise prices from ~$17 to at least $22–23 to maintain profit margins.
• VAT is now applied to the higher base (product + tariff), increasing liability further.

Cushioned Pet Beds

Product: Large pet beds (bulky, low-margin item)
Shipment: 40-ft container, 1,000 units
Country of origin: China
Carrier: Commercial (30% tariff applies)

Key Accounting Impact:

• Gross margin drops unless price per unit is raised by at least $3 - 5.
• Financial reporting must reflect the tariff as part of inventory valuation, impacting year-end financials and P&L.
• If inventory was already ordered under the old cost model, this can result in unexpected margin compression and misleading forecasts.

What Are the Key Challenges Facing E-commerce Accounting Practices With Tariffs?

New e-commerce tariffs affect importers and directly impact how accountants operate. From compliance burdens to COGS recalculations, accounting practices are now navigating more complexity than ever.

These are the core problems firms are facing when managing e-commerce clients affected by shifting trade policies.

1. Accountants Are Responsible for Complex Compliance - Often Without Clear Data

Clients expect their accountants to accurately reflect duties, taxes, and tariff-driven costs in their books. But in many cases, those figures aren’t easy to track or reconcile. Tariffs may vary by carrier, destination, and timing, and accountants are expected to apply the correct treatment without visibility into sourcing or shipping details.

What this means:

• You’re liable for recording tariff-affected costs correctly.
• You’re expected to explain fluctuations in profit and tax liability.
• And in the event of an audit, the burden is on you to justify how tariff data was handled.

2. Accounting Platforms and Sales Channels Don’t Match Up - Leading to Gaps

Most e-commerce sales platforms aren’t designed for accounting. Amazon, Shopify, and eBay offer basic reports, but they don’t consistently break down fees, duties, refunds, or taxes in a way that aligns with accounting standards.

As a result:

• Tariffs, VAT, and marketplace fees are often lumped together or mislabeled.
• Reports don’t include enough detail to categorize costs properly
• Accountants must manually adjust data from CSVs or portal exports to make entries usable.

This mismatch between operational platforms and accounting systems leads to inconsistencies, duplicated work, and hours lost reconciling payouts that don’t tie out cleanly.

Tariffs have only made this worse. Duties vary by shipment, carrier, and SKU, and without structured data from the source, accountants are left to fill the gaps manually.

3. Data Is Fragmented Across Systems - And Tariff Costs Rarely Live in One Place

Most accountants work across QuickBooks, Xero, Avalara, Dext, shipping platforms, inventory tools, and e-commerce storefronts. None of these systems, by default, map tariff data to accounting entries in a reliable way.

The result:

• Tariff costs are recorded inconsistently or missed entirely.
• Reporting is delayed due to manual consolidation.
• VAT is sometimes calculated on incorrect totals, leading to risk of overpayment or penalties.

4. Clients Don’t Understand Tariffs - But Expect You to Translate the Impact

For many e-commerce sellers, tariffs are confusing. They don’t know if duties were charged, what the rate was, or how it affects their finances. But when costs go up or VAT claims change, they ask their accountant to explain.

Firms are increasingly forced to take on an advisory role:

• Helping clients understand gross margin erosion
• Explaining why payout amounts don’t match expected revenue
• Adjusting pricing models to account for rising landed cost

Yet most practices weren’t set up to deliver this level of analysis, especially with incomplete data.

5. Tariffs Slow Down the Month-End Close

Every new tariff category adds a variable cost that must be reconciled. When this information isn’t standardized or integrated, the month-end close is delayed. Accountants are left chasing down customs documents, reclassifying invoices, and correcting errors that could have been automated.

Even firms using automation for traditional reconciliation now struggle to handle the volume of exceptions introduced by tariffs.

Why Using the Right Technology Matters Now More Than Ever for Your Practice

Tariff regulations have introduced more complexity into e-commerce accounting than most platforms can support. Sellers who sell on platforms like Amazon (Amazon tariffs apply), Shopify, and even Etsy (Etsy tariffs apply) are affected. For accounting firms working with multi-channel sellers, the margin for error is narrowing, and the expectations are rising.

Here’s why technology is now a critical part of the accounting function:

1. Platform Reports Are Incomplete and Unreliable for Accounting Purposes

Seller dashboards are not designed for financial reconciliation. They often combine or exclude key data like duties, tax adjustments, withheld reserves, or platform-specific fees. Accountants are left working with fragmented reports that don’t tie out to deposits or match the format required by accounting software.

Firms need tools that normalize this data and ensure consistency across all clients and sales channels.

2. Tax and Tariff Treatment Varies by Platform, Carrier, and Region

Most accounting software don't automatically apply the correct tax logic for marketplace-collected VAT, OSS, or cross-border shipping with tariffs. Without automation, firms must manually check how each transaction should be classified, a process that is time-consuming, error-prone, and difficult to scale.

Specialized tools are now essential to manage these variables accurately and reduce exposure to compliance risk.

3. Reconciliation Needs to Be Built-In 

If your reconciliation process depends on exporting reports, adjusting for fees, and manually creating invoices, your team is losing hours every week. That time adds up, and in a high-volume e-commerce environment, the cost is measurable.

The right technology automatically creates clean, categorized entries that align with actual bank deposits and reduce the risk of misstatements.

4. Advisory Work Requires Better Data 

Clients expect more insight from their accountants. They want to know how tariffs are impacting margins, what their VAT liability is by region, and how costs are trending. Without real-time, accurate data from all their sales channels, firms can’t offer that guidance with confidence.

Modern accounting practices need integrated tools that deliver actionable financial data across multiple platforms, not static reports from one source.

How Link My Books Can Help You With Your E-commerce Accounting

For accounting firms working with e-commerce clients, generalized tools no longer meet the complexity of today’s cross-border transactions and tariff reporting. What’s needed is a platform purpose-built for reconciling e-commerce payouts, applying tax rules accurately, and scaling across multiple sales channels without sacrificing accuracy.

Automates Accurate COGS & Tariff Tracking

Link My Books sits between e-commerce platforms (Amazon, eBay, Shopify, etc.) and your accounting software (Xero or QuickBooks). It breaks down each payout into:

• Sales
• Refunds
• Platform fees
• Taxes (including tariffs and VAT)

This means you get real-time, tax-compliant financials that reflect changes in landed cost, including new tariff expenses.

VAT and OSS Compliance Where Platforms Fall Short

Link My Books doesn’t calculate customs duties or tariffs, but it does support:

• VAT Product Grouping (assign correct tax codes by product/SKU)
• Marketplace vs. seller tax separation (e.g. OSS, US Marketplace Facilitator laws)
• Region-specific VAT handling for UK, EU, and international sellers

This ensures transactions are properly categorized for tax purposes, something most seller platforms don’t provide natively.

One-Click Reconciliation

Manual reconciliation across channels is a time sink, especially when payouts don’t match expected revenue due to tariffs or withheld taxes.

Link My Books generates a single, clean summary invoice per payout and posts it into your accounting system. It automatically:

• Applies the correct tax codes
• Tags VAT and duty appropriately
• Matches the invoice to the bank deposit
• Your end-of-month close just got faster, and cleaner.

Real-Time Reporting That Highlights Margin Impact

With tariffs squeezing profits, visibility matters more than ever.

Link My Books shows cross-channel performance, letting you and your clients:

• Spot unexpected cost spikes (e.g. due to new duties)
• Compare profit margins by SKU, region, or platform
• Monitor trends in fees, shipping, and taxes
• This allows you to course-correct fast,  not after Q4 is over.

Connects to Every Major Sales Channel

Whether your clients sell on Amazon, Shopify, Etsy, eBay, Walmart, TikTok Shop, or do multichannel e-commerce, Link My Books pulls in their data automatically.

• Import sales, fees, and taxes in real time
• Sync with Xero or QuickBooks instantly
• One tool, all your e-commerce clients covered

This eliminates the need to chase down CSVs from multiple dashboards - and gives you a single source of truth across all sales channels.

One platform. Every channel. Fully automated.

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Designed for Accountants

Whether you serve 5 e-commerce clients or 50, Link My Books gives you:

• Multi-client dashboard access
• Accountant-friendly export formats
• Guided tax wizard and VAT Product Grouping

No need to guess which client is out of sync - you'll see everything at a glance. On top of that, we offer special features for accountants.

Partner Program

Get featured in front of 10,000+ e-commerce businesses using Link My Books. Our Partner Program helps accountants grow their practice by matching them with sellers who need expert support.

Flexible Billing Options

Bill clients your way. Either let them pay us directly or roll everything into a single subscription for your firm, and unlock volume discounts while you're at it.

Effortless Client Onboarding

Onboard e-commerce clients in minutes, not days. Link My Books makes it easy to scale your practice with a seamless setup process for every sales channel.

Want to see how Link My Books integrates with your firm’s workflow? Start a free trial or book a live demo.

👉Start your free 14-day trial or book a 1:1 walkthrough today.

So What Does the Future Hold?

Tariffs are no longer a trade policy footnote, they’re a permanent part of the e-commerce accounting landscape. And as political pressure, supply chain shifts, and global negotiations continue, accountants will need to stay agile.

Here’s what to expect in the next 6–12 months:

1. Tariff Volatility Will Continue

The 90-day reduction on Chinese goods is a political placeholder, not a solution. With elections looming and geopolitical tensions high, tariffs could just as easily jump back to 145% with little warning.

Accountants must build flexible systems that can adapt to sudden cost shifts and help clients plan for worst-case pricing scenarios.

2. Audit Scrutiny Will Increase

As customs authorities tighten enforcement on imports and de minimis declarations, businesses will face higher risk of audit. That means:

• More documentation requirements
• Closer review of COGS, VAT claims, and shipping classifications
• Fines for incorrect or inconsistent filings

Clean data and system-generated reports will be essential. Manual errors will get expensive.

3. Clients Will Expect Strategic Guidance

Your e-commerce clients aren’t just looking for compliance, they need a partner who can help them protect profits, forecast cash flow, and make pricing decisions that account for tariff costs.

Accountants who offer strategic forecasting, margin analysis, and tariff risk modeling will be in demand and able to command premium pricing.

FAQ on the Tariffs for Accounting Practices

How Should We Approach Our Messaging & Positioning on Tariffs?

Be proactive, not reactive. Your clients are already hearing about rising costs and political uncertainty. Position your firm as:

• A strategic advisor on cost forecasting
• A compliance partner who keeps them out of trouble
• A tech-enabled practice that automates messy tariff and VAT data

Tip: Use client newsletters and quarterly reviews to educate sellers on how tariffs affect margins, pricing, and tax treatment.

How Will Accounting Practices Be Affected?

In three words: more complexity, faster.

You’ll need to:

• Break out duties in cost accounting
• Track tariff changes by country and SKU
• Adjust VAT treatment on post-tariff landed costs
• Prepare for audits with clean, categorized records
• Translation: Your process needs to be airtight, or automated.

What Strategies Should I Adopt Now?

• Audit your clients' supply chains: Identify which SKUs are affected by new tariffs.
• Automate payout reconciliation: Use tools like Link My Books to reduce manual errors.
• Educate your team: Make sure junior staff understand how tariffs flow through to COGS, tax, and financial reporting.
• Update pricing models: Help clients adjust prices or sourcing before margin erosion hits hard.
• Segment your clients: Prioritize those most affected (import-heavy, China-based sourcing) for hands-on guidance.

Streamline Your E-commerce Accounting Automatically With Link My Books

Tariffs, platform fees, VAT complexity, and multi-channel chaos - all of it adds up. But your accounting process doesn’t have to.

Link My Books automates the reconciliation, tax mapping, and reporting for your e-commerce clients so you can focus on advising, not firefighting.

✅ Seamless integrations with Amazon, eBay, Shopify, Walmart, Etsy, TikTok Shop
✅ Clean summaries that match payouts to Xero or QuickBooks in one click
✅ VAT and tariff-aware reports built for UK, EU, and international compliance
✅ Purpose-built for accountants scaling e-commerce client work

Want to see how it works for your firm?

👉Start your free 14-day trial or book a 1:1 walkthrough today.

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