Quick Answer: Section 122 tariff (10%) now in effect as of Feb 24. De minimis ad valorem-only deadline Feb 28. IEEPA refund window open for importers. CNY factories at 30-50% capacity. Red Sea routes partially reopening.

February 2026 delivered the biggest US trade policy shake-up in years. The Supreme Court struck down IEEPA tariffs on February 20 in a 6-3 ruling, invalidating over $160 billion in collected tariffs. The replacement 10% Section 122 tariff took effect February 24 with a 150-day expiration (July 24). Critically, the shift from country-specific IEEPA rates (up to 145% for China) to a flat 10% is actually a significant reduction for China-sourced goods. Importers can now pursue refunds on IEEPA duties paid since 2025 — but must take immediate action to preserve claims. The de minimis ad valorem deadline hits February 28 — postal shipments lose the last flat-rate duty option. TikTok Shop reversed its shipping mandate — independent fulfillment remains available. Post-CNY factories are at 30-50% capacity with full recovery not expected until mid-March. Ocean freight rates are at 2026 lows, down 40% year-over-year. Red Sea routes are partially reopening — Maersk traversed the route for the first time in two years. The EU approved a flat EUR 3/item duty effective July 1. For dropshippers: recalculate landed costs under the new 10% tariff, act now on IEEPA refund claims, prepare for the Feb 28 ad valorem deadline, and expect shipping delays through mid-March.

February 2026: Tariff Upheaval & Post-CNY Recovery

This month's intelligence covers the Supreme Court's landmark tariff ruling, the new Section 122 tariff regime, post-CNY factory recovery, and critical platform changes.

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Chinese New Year: Peak Disruption Period

Key Dates:

What to Expect:

1. Pre-CNY Rush (Now - Feb 5): Factories racing to complete orders. Quality may slip.
2. Skeleton Crews (Feb 5-16): Some operations continue but expect delays.
3. Full Closure (Feb 16 - March 2): No production, no shipping from most factories.
4. Slow Restart (March 2-10): Workers return gradually, backlogs clear slowly.
5. Normal Operations (March 10-15): Full capacity resumes.

Our Approach:

• Pre-CNY inventory builds completed for high-volume clients
• Express shipping routes maintained during closure
• Backup suppliers in regions with staggered holidays activated
• Daily status updates on production resumption

Action Items:

1. Submit all urgent orders by February 5
2. Communicate extended processing times to customers (add 7-14 days)
3. Use this period for product research and Q2 planning
4. Monitor supplier communication — early responders post-CNY are reliable partners

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US-Nordic Tariffs: Now in Effect

Status as of February 1:

The 10% tariffs on Denmark, Sweden, Norway, and Finland announced in January are now officially in effect.

Current Understanding:

• Applies to all imports from Nordic countries
• Legal challenges pending but not blocking enforcement
• Affects approximately $X billion in annual trade (exact figures TBD)
• Greenland dispute remains unresolved

Impact on Dropshipping:

For China → Nordic dropshippers, the impact is indirect:

• Nordic customers may face higher prices on domestic alternatives
• No direct impact on China-sourced products to Nordic markets
• Watch for retaliatory measures that could affect shipping routes

For Nordic → US sellers:

• 10% duty increase affects product pricing
• Consider US-based alternatives or price adjustments

Our Assessment:

This primarily affects direct Nordic-US trade, not China-sourced dropshipping to Nordic markets. However, any escalation could disrupt shipping routes or introduce broader trade restrictions. We're monitoring daily.

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De Minimis Enforcement: February 28 Deadline

What's Changing:

Starting February 28, 2026, only ad valorem (percentage-based) duty calculations will be permitted for postal shipments. The current flat-rate options ($80/$160/$200 per package) will no longer be available.

Implications:

Note: Exact ad valorem rates depend on HTS classification. Some products may see lower duties, others higher.

Action Items:

1. Review HTS codes for all products before February 28
2. Recalculate landed costs with ad valorem duties
3. Adjust pricing if necessary
4. Ensure all customs documentation is current

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Mexico Platform Compliance: 60 Days to Deadline

April 1, 2026 Requirements:

• Digital platforms must be registered with SAT
• 50% VAT withholding required when seller provides RFC
• Real-time data access to Mexican tax authority
• 5-year data storage with SAT access

Countdown Actions:

• February: Begin compliance review with legal/accounting
• March: Complete SAT registration if required
• April 1: Full compliance mandatory

For sellers using third-party platforms (Shopify, WooCommerce), your platform must be compliant. Direct sellers to Mexico need individual compliance.

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Mexico 50% Tariffs on Chinese Imports

Status: In Effect Since January 1, 2026

Mexico implemented 50% tariffs on 1,463 product categories from China, effective January 1, 2026. This is a significant development for China → Mexico dropshippers.

Affected Categories Include:

• Electronics and accessories
• Textiles and apparel
• Home goods and furniture
• Toys and games
• Many common dropshipping products

Impact on China → Mexico Dropshipping:

Critical Distinction:

These tariffs apply to commercial imports, not to duty-inclusive shipments under de minimis thresholds. Our duty-inclusive Mexico service remains unaffected for qualifying shipments.

Action Items:

1. Verify which of your products fall under affected HTS codes
2. Recalculate landed costs for Mexico-bound products
3. Consider pricing adjustments or product mix changes
4. Contact us about duty-inclusive options for eligible products

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US Carrier Rate Increases: 2026 Impact

FedEx & UPS General Rate Increase (GRI)

Both major carriers implemented their annual rate increases effective January 6, 2026:

• Announced increase: 5.9%
• Actual impact: 8-12% (due to compound effects)
• Minimum charge: Increased to $11.99 per package

Why Actual Impact Exceeds 5.9%:

• Dimensional weight adjustments
• Fuel surcharge baseline changes
• Zone expansions
• Peak/demand surcharges layered on top

For Express Shipping:

Expect 10-15% higher costs compared to late 2025 for US-bound express shipments. Factor this into your pricing, especially during CNY when express options are more necessary.

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Transit Time Adjustments (February)

Express Options:

During CNY, express routes maintain closer to normal times:

• Express to US: 5-7 days (vs 10-15 standard)
• Express to EU: 5-8 days (vs 12-18 standard)
• Premium cost: Approximately 30-50% increase

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For High-Volume Sellers

1. Inventory Buffer: Should already be built. If not, expedite remaining orders immediately.
2. Customer Communication: Proactive messaging about delays builds trust.
3. Use Downtime: Product research, store optimization, marketing prep for Q2.
4. Supplier Evaluation: CNY response speed is a reliability indicator.

For Scaling Sellers

1. Don't Panic: CNY happens every year. Your competitors face the same constraints.
2. Communicate Delays: Add 7-14 days to processing times.
3. Plan Q2 Products: Use this time to research and test.
4. Review Suppliers: How did they perform pre-CNY? Make notes.

For New Sellers

1. Learn the Rhythm: CNY is the annual low point. Plan around it.
2. Focus on Foundation: Store setup, marketing prep, product research.
3. Don't Launch Products: Wait until March when supply normalizes.
4. Build Relationships: Reach out to suppliers now. Their response during CNY tells you a lot.

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US Logistics Layoffs Continue

The start of 2026 has seen a surge of layoffs across US logistics and manufacturing, affecting 2,200+ workers nationwide:

• FedEx is laying off 89 employees at a Texas facility, effective March 2, as part of Network 2.0 reorganization
• I Squared Logistics (Amazon DSP partner) shut down abruptly, laying off 160 drivers in North Carolina

What it means: The logistics sector is consolidating. Smaller 3PL providers are struggling, while major carriers continue restructuring. For dropshippers, this reinforces the importance of working with established fulfillment partners.

Fulfillment M&A Activity

• Stord acquired Ceva Logistics' e-commerce fulfillment unit, racing to gain scale
• Trinity Logistics acquired Granite Logistics (Minneapolis-based)

The consolidation trend continues as 3PLs build scale to compete.

Shopify Winter '26 Edition

Shopify launched 150+ updates in their "Renaissance Edition":

• Sidekick AI now executes tasks (not just answers questions) — builds apps, creates workflows
• Native experimentation with Shopify Rollouts for A/B testing themes
• Scripts deprecation extended to June 30, 2026
• Variant limits increasing to 2,048

Action: If using Shopify Scripts, plan migration to Shopify Functions before June 30.

PostNord Nordic Updates

• Climate achievement: 50% fossil-free transportation, 40% emissions reduction vs 2020
• Home Parcel changes (Jan 8): Delivery no longer requires recipient presence in Finland, Sweden, Norway
• Consolidated terms: New unified T&C for all parcel services effective January 1

Mexico Customs Value Declaration Deadline

New deadline: April 1, 2026 — The requirement to submit Customs Value Declaration electronically via VUCEM was pushed back from January. Prepare documentation now.

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TikTok Shop: End of Independent Shipping ⚠️

Critical deadline: February 25, 2026

TikTok Shop is eliminating seller-managed shipping for US sellers. All orders must use TikTok Shop Logistics:

New requirements:

• Orders must be carrier-scanned within 2 business days (affects Late Dispatch Rate)
• USPS labels must be purchased through TikTok Shipping (effective Jan 6)
• $1,500 security deposit for cross-border POP merchants

Impact: Dropshippers relying on independent fulfillment need to switch to TikTok-approved logistics or exit the platform. This signals TikTok's shift toward enterprise sellers.

Meta Ads: Algorithm & Policy Shifts

Andromeda Algorithm (Active)

Meta's new algorithm controls targeting based on your creative — not your audience settings. Broad targeting now outperforms detailed interest targeting.

Key changes for 2026:

• Lookalike audiences being phased out (replaced by ML-based predictions)
• EU users get less-personalized ad option (January 2026, post-€266M fine)
• Data source disclosure required for remarketing campaigns
• Stricter ad identity verification for financial/professional services

Action: Diversify creative assets (static, UGC, video, founder content). Static images still drive 60-70% of conversions.

Payment Processor Updates

Stripe:

• New $15 dispute counter fee (refundable if you win)
• Smart Disputes AI tool waives counter fee but takes 30% of recovered amounts

PayPal:

• Stale credential fee increased: $0.03 → $0.09 (US), $0.09 new fee (Asia-Pacific, Feb 1)
• Level 2 program sunsetting April 2026

IRS 1099 threshold change: Third-party processors (PayPal, Stripe) issue 1099-K only when exceeding $20,000 AND 200+ transactions.

Google Ads Changes

• Call-only ads deprecated: No new creation from Feb 2026, stops serving Feb 2027
• API conversion data changes (Feb 2): New restrictions on session attributes and IP address data
• TCF v2.3 required: Publishers must transition by February 28

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Israel: VAT Threshold Doubled 🎉

Effective December 23, 2025 — Israel increased the VAT exemption threshold for personal imports from $75 to $150 (excluding shipping). This is a significant win for dropshippers targeting Israel.

What it means: Products under $150 clear customs without VAT, improving margins and reducing delivery friction. The Federation of Israeli Chambers of Commerce filed a petition against this increase, but the Court declined to block it.

Market context:

• ~50% of Israeli internet users purchase online weekly
• Free delivery is the #1 driver for online purchases
• Red Sea disruptions continue affecting Eilat port (Houthi-related), but Haifa/Ashdod operate normally

Nordic Markets: BNPL Boom Continues

Klarna dominates across Sweden, Norway, Finland with deep retailer penetration. BNPL is how Nordics shop.

Key trend: Banks (SEB, Swedbank) are scaling card-linked installments, competing with Klarna. EU Consumer Credit Directive II (CCD II) brings BNPL under standardized disclosure rules in 2025-2026.

For dropshippers: Offering Klarna/BNPL at checkout is increasingly expected in Nordic markets.

EU: Mandatory Return Button Coming

Deadline: June 19, 2026 — All EU online stores must implement a clearly visible "return button" for the 14-day withdrawal right.

Requirements:

• Button must be easy to find, visible throughout the 14-day period
• No registration required to use it
• Automatic confirmation of receipt with date/time

Additional EU deadlines:

• Sept 27, 2026: Mandatory warranty labels
• July 31, 2026: Right to Repair Directive applies
• Q4 2026: Digital Fairness Act proposal (targeting dark patterns)

Impact: Stores selling to EU must update checkout/account UX before June 19.

Chargeback & Fraud: 40% Rise Expected

2026 projections are concerning:

First-party (friendly) fraud is now 36% of all fraud (up from 15% in 2023). This is customers disputing legitimate purchases.

Most disputed categories:

1. Clothing (21% friendly fraud rate)
2. Subscriptions (19%)
3. Electronics (18%)

AI-powered fraud rising: Synthetic identity fraud up 31%, deepfake scams up 28% in 2024.

For dropshippers: Factor in ~$207 total loss per $100 in fraud (including fees, shipping, support). Stripe's new $15 dispute counter fee adds to the cost of fighting chargebacks.

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CNY Peak Closure: Factories Shutting Down

We're now in the peak Chinese New Year closure period. The official Spring Festival public holiday runs February 15-23, with most factories fully closed. Key timeline:

• Feb 5-14: Skeleton crews, reduced output
• Feb 15-23: Official holiday — full closure
• Feb 24 - March 3: Gradual reopening (~35% workforce)
• March 10-15: Full capacity expected

Surprise development: Despite tariff pressures, CNBC reports Chinese factories and ports are buzzing with activity heading into CNY. Container activity surged, pushing up freight prices for US-bound shipments above 2024 and 2025 levels. This suggests strong pre-CNY order volumes despite the trade environment.

Action: If you haven't placed pre-CNY orders yet, it's too late for standard production. Express shipping routes remain available but at premium pricing.

PostNord Goes Parcel-First: Danish Mail Delivery Ends

PostNord has officially ended state-run letter delivery in Denmark — a world first. Starting 2026, PostNord delivery vans in Denmark carry only parcels.

Key numbers:

• Parcel volumes up 11% in Q4 2025 (82 million parcels)
• B2C parcels: +12%
• B2B parcels: +4%
• ~1,300 Parcel Shops and ~3,300 Parcel Boxes across Denmark

PostNord also hit its 2025 climate milestones: 50% fossil-free transport and 40% emissions reduction vs 2020. Heavy-duty electric trucks now operate in all four Nordic countries.

What it means: PostNord is doubling down on parcel infrastructure, which benefits dropshippers targeting Nordic markets. More parcel lockers and pickup points means better last-mile delivery options.

2026 pricing: PostNord has announced new tariffs for 2026, citing inflationary pressures and rising labour costs. Expect slightly higher shipping costs to Nordic destinations.

Meta Organic Algorithm: Demoting Unoriginal Content

Meta is rolling out an organic content update that demotes "unoriginal" (repurposed) content and expands reach for high-quality original content. This is separate from the Andromeda ads algorithm change.

Impact for dropshippers:

• Repurposed UGC or copied content will get less reach
• Original product demos, founder stories, and unique creative will be rewarded
• Facebook Pages that post scraped or reposted content will see declining reach

Action: Invest in original content creation. If you're reposting supplier videos or copying competitor ads, expect declining organic reach on Facebook.

EU Product Liability: Platforms on the Hook

The new EU Product Liability Directive becomes applicable at the end of 2026. The key change for dropshippers:

When neither the manufacturer, distributor, nor fulfilment service provider can be identified, the online platform where the product was sold becomes liable for damage caused by defective products.

This is a significant shift. EU regulators are closing the enforcement gap where consumers buy from anonymous sellers on platforms.

Additional 2026 EU deadlines:

• June 19: Mandatory online withdrawal (return) button
• July 31: Right to Repair Directive applies
• Sept 27: Harmonized warranty labels required
• Q4: Digital Fairness Act proposal (targeting dark patterns, influencer marketing, AI chatbots)
• Q4: European Product Act (market surveillance for imports/e-commerce)

Action: If selling to EU customers, ensure your product sourcing is traceable and your returns process is compliant before the June deadline.

Shopify: Shop.app Pages Now Indexed

A notable Shopify update from February: shop.app pages are now indexed by search engines by default. This means your Shopify store's Shop app presence can appear in Google results, adding a potential organic discovery channel.

Other Shopify updates:

• Payout exports now include Bank Reference for easier reconciliation
• Inventory management improvements: edit shipment items at any stage
• Sidekick AI can now write ShopifyQL queries for analytics

Trade Environment: Tariffs Stabilize Under Truce

The US-China trade situation has stabilized under a one-year tariff truce (through November 2026) that keeps tariffs at reduced levels. Current effective rate on Chinese goods: ~34.7%.

Meanwhile, China cut import duties on 935 items starting January 1, focusing on tech self-sufficiency, green transition, and healthcare — signaling strategic diversification rather than trade war escalation.

For dropshippers: The tariff truce provides temporary stability. Don't make long-term infrastructure decisions based on current rates — they could change when the truce expires in November 2026.

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Supreme Court Strikes Down IEEPA Tariffs

February 20, 2026 — the biggest trade policy ruling in years.

In Learning Resources Inc. v. Trump, the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. This invalidated both the "trafficking tariffs" on China, Canada, and Mexico, and the "reciprocal tariffs" on most other countries — tariffs that had raised over $160 billion since implementation.

Immediate fallout:

What Section 122 means:

• 10% tariff on all non-USMCA imports (the administration announced a hike to 15% but never signed the amended proclamation; 15% is the statutory ceiling)
• Explicitly temporary — 150 days maximum (expires July 24, 2026)
• Products already under Section 232 tariffs (steel, aluminum) are exempt
• Does NOT apply to USMCA-qualifying goods from Canada/Mexico

For dropshippers:

1. Recalculate landed costs — the 10% rate replaces prior IEEPA rates, which varied by country
2. Monitor expiration — this tariff must end by July 24 unless Congress acts
3. USMCA advantage — goods qualifying under US-Mexico-Canada trade agreement are exempt
4. Expect volatility — the legal and political landscape around tariffs is now highly fluid

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De Minimis Suspension: Still Dead, New Legal Basis

The $800 de minimis exemption remains suspended. A new executive order on February 24 continues the global de minimis suspension under fresh legal authority (since IEEPA was struck down).

Current rules:

• All goods under $800 are subject to full duties, taxes, and fees
• Postal shipments face either ad valorem duty or a specific duty of $80-$200 per item
• The specific duty option remains available for six months before mandatory ad valorem transition
• Applies to shipments from ALL countries

Action: Ensure all customs documentation is current. Every sub-$800 shipment now requires full declarations.

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TikTok Shop Reverses Shipping Mandate

The February 25 deadline that wasn't. TikTok Shop reversed its plan to force all US sellers onto TikTok-managed shipping after significant seller backlash.

What happened:

• Original plan: All sellers must use TikTok Logistics by February 25
• Seller response: Brands threatened to pull back, narrow product assortments, or exit entirely
• February 17: TikTok issued a letter halting the mandate — "Seller Shipping remains unchanged"
• Remaining restriction: Sellers using USPS must purchase labels through TikTok Shipping

What it means: If you were planning a fulfillment migration, you can stand down. Independent shipping through 3PLs remains available. The USPS-only restriction is the one change that sticks.

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EU Approves Flat-Rate Duty on Small Parcels

Effective July 1, 2026 — The EU Council formally approved a flat-rate customs duty of EUR 3 per item category on parcels under EUR 150.

Key details:

Impact: This adds roughly $3.25 per item to EU-bound shipments. Factor this into pricing for European markets immediately. After July 2028, normal tariff rates will apply through the new EU customs data hub.

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Hapag-Lloyd Acquires ZIM for $4.2 Billion

German shipping giant Hapag-Lloyd signed a merger agreement to acquire Israel-based ZIM at $35/share (58% premium). The combined entity becomes the 5th largest container line globally with 400+ vessels. A carved-out "New ZIM" entity with 16 vessels will continue operating under the ZIM brand. Closing expected late 2026.

Relevance: ZIM is a major carrier for Israel shipping routes. Monitor for any service changes during the merger transition. A carved-out ZIM entity suggests continuity for existing Israel route coverage.

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Post-CNY Recovery: Factories at 35% Capacity

China observed its longest-ever Spring Festival: 9 days (February 15-23). Factories are now nominally reopening but at roughly 35% workforce capacity.

Recovery timeline:

Up to 25% of factory workers may not return to their previous employers post-CNY. Port backlogs will take 2-3 weeks to clear. The recommended shipping window resumes after March 3.

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Ocean Freight Rates Collapse Post-CNY

Asia-US container rates dropped sharply after the Chinese New Year rush:

Carriers responded with 107 blank sailings in February — a 38% increase from projections. Capacity withdrawals reached 60% on Pacific Southwest routes. Rates are near or below carrier break-even levels.

For dropshippers: This is a favorable window for ocean freight procurement. However, blank sailings may cause scheduling disruptions. Express/air routes remain more predictable.

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Shopify Winter '26: Agentic Commerce

Shopify launched "Agentic Storefronts" — merchants can now be discovered and sell directly within ChatGPT, Perplexity, and Microsoft Copilot via the new Shopify Catalog. No custom integration required. Other notable updates: Sidekick AI now proactively predicts merchant needs, SimGym lets you test store changes with AI shoppers before real customers, and Scripts deprecation remains extended to June 30.

Action: If you're on Shopify, your products may already be discoverable in AI assistants. Verify your Shopify Catalog setup.

Meta Ads: Advantage+ Now Default

Meta made Advantage+ automation tools the default for new campaigns. Lookalike audiences are being fully phased out in favor of predictive ML models. A new image-to-video tool turns up to 20 product photos into video ads. Meta is moving toward its Generative Ad Model (GEM) where advertisers provide only a product URL, budget, and prompt.

Action: Stop building campaigns around detailed targeting or lookalike audiences. Invest in diverse creative assets — the algorithm optimizes based on creative signals, not audience settings.

Mexico Courier Tariff Increase to 33.5%

Mexico increased tariffs on courier shipments under USD 2,500 from 19% to 33.5% (effective January 1, 2026). However, this increase does NOT apply to US/Canada shipments under USMCA. Enhanced digital traceability and monitoring of e-commerce parcels is now in effect.

Impact: China → Mexico courier shipments face higher duties. Our duty-inclusive Mexico service helps absorb this complexity for eligible shipments.

WooCommerce 10.5 Released

New analytics processing (batch-processed every 12 hours), improved multi-package shipping display, new shipping tax class filter, and experimental REST API caching. Patch 10.5.1 fixed Divi theme and PayPal Standard compatibility issues.

Carrier Bankruptcies Continue

Multiple carriers filed for bankruptcy in early 2026: STG Logistics, Texas International Enterprises, Bulmaks. FedEx is narrowing its e-commerce focus to "specialized" shipments, moving away from low-margin B2C parcels. The consolidation trend reinforces the value of established fulfillment partnerships.

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Section 122 Tariff: Now in Effect

February 24, 12:01 AM ET — the 10% tariff is live.

The Section 122 tariff officially took effect, replacing the invalidated IEEPA tariffs. Key clarifications since our last update:

• 10% rate enacted — Trump announced a hike to 15% via Truth Social on Feb 21, but the amended proclamation was never signed. The enacted rate per Federal Register and CBP is 10%.
• 15% is the statutory ceiling — the president could still raise the rate up to 15% under Section 122, but hasn't formalized it
• Stacking rules: Section 122 duties stack on top of existing MFN duties, but do NOT stack on Section 232 duties (steel, aluminum)
• Additional exemptions confirmed: Pharmaceuticals, critical minerals, certain electronics, and semiconductors

The China math changed significantly. The shift from IEEPA rates (which reached up to 145% for Chinese goods) to a flat 10% is actually a major cost reduction for China-sourced products. However, 10% is still an additional cost on top of base MFN duties.

Goods-on-water exemption: Goods loaded on a vessel before Feb 24 and entered before Feb 28 are exempt from Section 122 duties.

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IEEPA Refund Window: Act Now

New opportunity for importers. The Supreme Court decision opens the door for refunds on IEEPA duties paid since 2025. However:

• There is no automatic refund mechanism — importers must take proactive steps
• Claims must be preserved through formal protest filings with CBP
• Legal counsel recommended for significant duty amounts
• Window to file may be time-limited

Action: If you or your clients paid significant IEEPA duties on Chinese imports, consult a trade attorney about preserving refund claims immediately.

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De Minimis: Ad Valorem Deadline in 3 Days (Feb 28)

The last simplified option disappears February 28.

During the transition period (Aug 29, 2025 – Feb 28, 2026), carriers could choose between ad valorem (percentage-based) or flat-rate ($80-$200/item) duty methods for postal shipments. Starting Feb 28:

• Ad valorem methodology only — actual HTS classification and percentage-based duties required
• Every sub-$800 postal shipment needs full formal processing
• A $15 item from China requires the same customs documentation as a $500 shipment

Action: Ensure all HTS codes are current and customs documentation is ready. This deadline is not being extended.

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Red Sea: Partial Reopening

Maersk traversed the Red Sea for the first time in two years after reduced Houthi attacks. However, the return is tentative:

• Only ~18.7% of east-to-west traffic is using the Suez Canal (vs ~80% pre-disruption)
• CMA CGM actually moved some services back to Cape of Good Hope routing due to continued uncertainty
• Full normalization is not expected near-term

For dropshippers: Air freight and established carrier routes remain more predictable than ocean for time-sensitive shipments. The partial reopening may gradually reduce ocean freight costs, which are already at 2026 lows (down 40% YoY).

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Shopify Q4 2025: Strong Growth

Shopify reported Q4 2025 results on Feb 11:

• Revenue growth: 31% year-over-year
• Free cash flow margin: 19% (10 consecutive quarters of double-digit FCF margins)
• $2 billion share buyback authorized, effective Feb 17
• Winter '26 "Agentic Storefronts" — products now directly discoverable in ChatGPT, Perplexity, and Microsoft Copilot via Shopify Catalog
• New AI-driven HTS classification tools to help merchants with tariff compliance

Action: Verify your Shopify Catalog setup — your products may already be discoverable in AI assistants without any additional configuration.

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Meta Ads: Threads Goes Global, New Features

Several Meta advertising updates in late February:

• Threads ads now rolling out globally — add Threads account to Meta Business Suite
• Ad sequencing available for Awareness and Engagement campaigns (show ads in a specific order)
• WhatsApp Ads — centralized campaign management through Meta Ads Manager
• EU political ad ban coming under new EU Transparency Act

Action: If you haven't added Threads to your Meta advertising mix, now is the time to test. Early adopters typically get better CPMs on new placements.

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Mexico Customs Reform: Penalties Up to 300%

Mexico's sweeping customs law reform (effective Jan 1, 2026) continues to tighten enforcement:

• Real-time risk analysis now required for courier/parcel operators
• Enhanced supplier verification — importers must verify foreign suppliers have legal and physical capacity before transactions
• Shared liability — customs brokers now share liability with importers for compliance
• Penalties: Up to 300% of goods' value for non-compliance or inaccurate data
• Digital documentation — all customs values and supporting docs must be transmitted via VUCEM before clearance

Our assessment: Our duty-inclusive Mexico service handles this complexity for eligible shipments. Sellers using other fulfillment providers should verify their customs compliance processes are updated.

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Key Dates:

• March 2: Lantern Festival — nominal CNY end
• March 10-15: Full factory capacity expected
• March 15: Q1 shipping data available for analysis
• April 1: Mexico SAT platform compliance deadline

Watch Items:

• Post-CNY supplier reliability (who restarts fastest?)
• Section 122 tariff implementation — are there enforcement gaps or exemption expansions?
• Congressional response to SCOTUS ruling — will they authorize new tariff authority?
• Ocean freight rate trajectory — will blank sailings stabilize rates?
• EU EUR 3/item duty preparation (July 1 deadline, 4 months out)
• Hapag-Lloyd/ZIM merger impact on Israel shipping routes
• Meta Ads performance under full Advantage+ default rollout
• Mexico platform compliance progress (April deadline looming)

Want fulfillment that adapts to changing conditions? Just DS monitors regulatory changes across 15+ countries and adjusts routing proactively. Zero MOQ. Talk to us on WhatsApp.

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What does the Supreme Court IEEPA ruling mean for my costs?

The IEEPA tariffs are gone, but they were immediately replaced by a 10% Section 122 tariff on all non-USMCA imports. Depending on what you were paying before, your costs may have gone up or down. The key difference: Section 122 is explicitly temporary (150 days, expires July 24). Recalculate your landed costs with the 10% rate now.

Is the de minimis exemption coming back?

Not anytime soon. A new executive order on February 24 continues the global suspension under fresh legal authority. Every sub-$800 shipment requires full customs declarations and duties.

When will shipping return to normal after CNY?

Most routes normalize by March 10-15. Factories are at roughly 35% capacity now and ramping up gradually. Express options remain available throughout but at premium pricing.

Did TikTok Shop actually end independent shipping?

No — they reversed the mandate after seller backlash. Independent shipping remains unchanged. The only restriction that stuck: USPS labels must be purchased through TikTok Shipping.

How does the EU EUR 3/item duty affect my business?

Starting July 1, 2026, all parcels under EUR 150 entering the EU face a flat EUR 3 per item category duty. This is in addition to existing VAT. Factor approximately $3.25 per item into EU pricing. This interim measure runs until July 2028.

Will the Hapag-Lloyd/ZIM merger affect Israel shipping?

A carved-out "New ZIM" entity with 16 vessels will continue operating under the ZIM brand, suggesting route continuity. Monitor for any service changes during the transition. Closing is expected late 2026.

Should I change my Meta Ads strategy?

Yes. Advantage+ is now the default. Lookalike audiences are being fully phased out. Meta is moving toward a model where you provide a product URL, budget, and prompt — the algorithm does the rest. Invest in diverse creative assets rather than audience targeting.

Do Mexico's tariff increases affect my dropshipping business?

Mexico increased courier tariffs from 19% to 33.5% for shipments under $2,500. However, USMCA-qualifying goods from the US/Canada are exempt. For China-sourced products, our duty-inclusive Mexico service helps manage this complexity for eligible shipments.

How much will the carrier rate increases affect my margins?

Headline 5.9% GRIs mask effective increases of 10-20% when surcharges are included. USPS Ground Advantage is up 7.8%. Multiple smaller carriers have gone bankrupt in early 2026, reducing competition. Factor these increases into pricing.

Should I offer Klarna/BNPL for Nordic customers?

Yes, if you're serious about Nordic markets. BNPL is the default payment expectation in Sweden, Norway, and Finland. Klarna has deep penetration and shoppers expect installment options at checkout.

How do I prepare for the EU mandatory return button?

If you sell to EU consumers, you need to implement a clearly visible return/withdrawal button by June 19, 2026. It must be accessible without login, visible during the 14-day cooling-off period, and generate automatic confirmation receipts. Start planning your UX changes now.

Can I get a refund on IEEPA tariffs I already paid?

Potentially yes. The Supreme Court ruling opens the door for refund claims on IEEPA duties paid since 2025. However, there's no automatic refund mechanism — you must file formal protests with CBP to preserve your claims. Consult a trade attorney if you paid significant IEEPA duties, as the filing window may be time-limited.

What happens after the Section 122 tariff expires on July 24?

Section 122 has a hard 150-day limit. Unless Congress passes new tariff legislation before July 24, 2026, the tariff expires automatically. Watch for congressional action — several bills are being discussed. The uncertainty makes long-term pricing decisions difficult.

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February 2026 will be remembered as a tariff inflection point. The Supreme Court's IEEPA ruling dismantled the existing tariff framework overnight, and the replacement 10% Section 122 tariff — now in effect as of February 24 — creates temporary certainty but long-term uncertainty. The surprising takeaway: for China-sourced goods, the flat 10% is actually lower than the previous IEEPA rates that reached up to 145%. Meanwhile, importers should act immediately to preserve IEEPA refund claims. The de minimis ad valorem deadline hits February 28. On the operational side, post-CNY recovery is underway but slow (30-50% capacity), TikTok backed down on shipping mandates, Red Sea routes are tentatively reopening, and ocean rates are at their lowest point this year. Use this window to recalculate costs, pursue IEEPA refunds, lock in favorable freight rates, and prepare for the EU's July 1 duty on small parcels.

Next Report: March 2026 — Post-CNY Recovery & Section 122 Impact Analysis

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Last updated: February 25, 2026

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