DEEPER DIVES: The Messy Middle

Good Evening,

First, as always, thank you for joining.

This week’s edition has a specific focus. Help SMBs and D2C brands squeeze a bit more from their operations.

Every dollar counts right now, and whatever you can do to ensure more cash flows to your bottom line, the better off you’ll be.

Here’s what this issue brings:

• There’s been a lot of noise that the US tariff policy is “beating China” and that they’ll make a huge deal. Could this happen? Sure. Do I think that’s how things will go? No. Here’s more context with respect to what’s happening and why you need to double down on making sure you are making the best Supply Chain decisions for your business.
  

• Shopify’s backend is one of the best in the game. Instead of leaning on everyone else’s app, roll up your sleeves and explore ShopifyQL.
  

• Automation tools to the most advanced AI agents all use JSON to talk to each other. If you want to be able to do more, and spend less, you need to understand the JSON formatting.

China Isn’t Collapsing, and the Tariffs May Stick. What That Means for Your Supply Chain

If your company sources product from China, the past few months have been a hard lesson in uncertainty.

A trade war business leaders hoped was history roared back to life on April 2, when the United States and China slapped reciprocal 34 percent “Liberation Day” tariffs on each other’s products.

Nine days later, those duties peaked at 145% on Chinese goods entering the United States and 125% on U.S. exports heading to China.

Then, businesses saw a short truce after talks in Geneva on May 12, that dropped rates to 30% (U.S.) and 10% (China), but parties on both sides admit the core issues remain unresolved.

In Washington (or by anyone more interested in pushing politics versus facts), the story is that the economic pressure is working, that China’s economy is “tanking,” and that a victory for the American position is about to happen.

That view is dangerously incomplete.

China is bending, but they aren’t breaking.

And its strategic policy shift could reshape global supply chains for years to come.

For small and mid-sized brands, manufacturers, and logistics providers, it’s important to get this reality. It will help guide your decisions that will keep your doors open.

I’m going to give you a clear view of the situation.

It does three things:

• It cuts through the headlines to show the true state of China’s economy

• It explains why Beijing’s shift toward its own consumers matters more than any one tariff headline

• It offers concrete, actionable moves every operator can take right now to build a more resilient business

Deconstructing the “China Is Tanking” Narrative

The case against China’s economy is built on hard data, and critics have plenty of it on their side.

The most significant downward trend comes from the property market, an industry that once made up to 30 percent of China’s GDP and is now in a serious and prolonged contraction.

During January and February of 2025, new residential floor-space starts fell 29.6% year-on-year, while property sales by area dropped 21%.

Economists estimate this slowdown alone has shaved about 1.2% points from what GDP growth could have been.

Deflation adds significant weight to this argument.

Consistently falling prices can crush business profits and discourage consumer spending.

China’s consumer prices have been negative since the third quarter of 2024, and its producer prices (a key measure of factory-gate costs) have stayed below zero for eleven straight months.

Those numbers suck.

They represent real challenges for Beijing. But the “free-fall” story they seem to tell misses three powerful counters that paint a more complex (and resilient) picture.

First, output is still growing.

Despite the real estate challenges, the National Bureau of Statistics reported 5.4 percent real GDP growth in the first quarter of 2025, a number that came in well above Beijing’s own 5% target and exceeded forecasts.

This is not a sign of an economy on the verge of collapse.

Second, there is external validation for the growth.

A U.S. Federal Reserve factor model, an alternative indicator built specifically to detect “too-smooth” or manipulated data, now tracks the official Chinese series almost point for point.

This is a significant change from the pre-2020 period when official figures were often viewed with skepticism, and it lends credibility to the headline number.

Finally, capital is moving from speculation to production.

Fixed-asset investment reports show that as property investment has declined, manufacturing investment has risen to fill the gap, gaining roughly two percentage points of GDP between 2020 and 2024.

This has fueled a surge in industrial production, which is now sitting above pre-pandemic levels.

Anchored by the global demand for Chinese-made EVs, solar panels, and electronics.

In April, total exports rose 8.1% YoY, despite the tariff drama.

The property bust is real, but it’s not enough to pull the wider economy into turmoil.

From Exports to (Domestic) Consumers

Because of all of the external pressures China is facing, Beijing has made household spending as its top economic goal for the first time in a decade.

Their biggest investment is a $300B (Yuan) trade-in program that subsidizes 15% to 20% of the price of new phones, refrigerators, and other durable goods.

But even with this huge investment, the real numbers diminish the hype.

$300B equals just 0.23% of GDP and 0.6% of total retail sales.

At best, it’s viewed as a shot of espresso, not a new solution.

But the real strength of the policy lies in the less-publicized structural changes happening behind the scenes.

Eight broader levers sit behind the headline cash:

• Higher minimum wages tied to local living-cost formulas

• Tax tweaks that raise disposable income for low- and middle-income households

• Easier access to the equity market and new bond products for retail investors

• Forty-eight targeted measures to boost service spending in areas like travel, childcare, and fitness

• Housing-down-payment cuts outside the most expensive cities

• Targeted credit for electric-vehicle purchases

• Export-tax-rebate reductions on key products like refined oil, batteries, and solar panels (from 13 percent to 9 percent) to keep more production onshore

• Official position from President Xi about building a “long-term mechanism” so households “dare to consume without worries”.

The core problem is both cultural and structural.

The household savings rate is sitting near 37% of disposable income (almost triple the U.S. level).

Families save because they shoulder hefty out-of-pocket bills for health care, education, and retirement.

This is compounded by moderating wage growth; nominal urban labour rates rose 5.7% in 2024, well below pre-COVID averages that were above 8%.

A one-time cash voucher doesn’t erase that reality quickly, but regular labour rate gains combined with a slowly strengthening safety net can (and will) have siginifican’t impact.

Why Tariffs May Stick Around

Washington’s strategy is simple: raise costs on Chinese goods, squeeze corporate profits, and push factories to relocate back to the United States.

But, three macroeconomic factors limit that leverage and reduce the odds of a clean, quick rollback of duties.

First, China’s trade surplus creates a massive financial buffer.

With a goods surplus of nearly $1T in 2024 ($992.2 billion), China has the fiscal room to cushion exporters and targeted industries from the worst effects of the tariffs, allowing them to absorb costs and maintain employment for longer than many think.

Second, China’s manufacturing scale provides a deep competitive moat.

China still accounts for about 33% of global industrial output (compared with 16 percent for the U.S.).

And it’s not just about factories.

It’s about the entire ecosystem of suppliers, skilled labour, and logistics infrastructure that is difficult and expensive to duplicate quickly elsewhere.

Finally, China’s policy shift directly undermines U.S. leverage.

By cutting export rebates and stimulating domestic demand, Beijing is actively working to make its economy less reliant on American customers.

Less reliance means that while tariffs still hurt, they are far less likely to cripple their economy or force major political concessions.

These realities do not guarantee tariffs will last forever, but they create a “strategic stalemate” between the two countries.

Ripple Effects

Supply chains are already showing the imapct the pressure.

From 2016 to 2024, China’s share of U.S. manufactured-goods imports fell from 21% to 13%.

Over the same period, Mexico’s share rose from 14% to 20%, with Vietnam, India, and Indonesia also all increasing their position.

The White House has now warned that partners enabling “trans-shipment” of Chinese goods could face duties of their own, creating another layer of risk for businesses that have already diversified.

Europe has also launched its own anti-subsidy probes into Chinese electric vehicles and solar hardware, fearing that U.S. tariffs will redirect a wave of low-priced Chinese imports into its markets.

For any business that runs on tight margins, this means a supplier or shipping lane that looks safe today could be a liability tomorrow.

A Checklist for Operators

For small and mid-sized businesses, banking on a diplomatic breakthrough isn’t a viable strategy.

The only real way to ‘win’, is by building resilience into your operations.

Diversify Beyond Tier-One Suppliers

Your main supplier may be in Vietnam, but where do their components come from?

True risk assessment requires mapping your supply chain two or three levels deep. Components can cross multiple borders before final assembly. You have to trace where value is actually added so you know which nodes in your network carry hidden duty risk.

Adopt a China-Plus-One Sourcing Grid

A complete exit from China is impossible for most, but over-reliance is a critical risk to mitigate

Adopt a "China-Plus-One" or "Plus-Two" strategy.

Mexico offers near-shore speed, but capacity is really tight.

Vietnam can support textiles and electronics.

India and Indonesia are getting better at what they can offer.

Splitting your volume allows you to shift if a single country’s policies or stability change overnight (check last week’s DEEPER DIVES for how SHEIN is doing exactly this).

Manage Freight Lanes, Not Just Rates

In logistics, space is a commodity.

Spot ocean rates jumped 30% in April as exporters front-loaded shipments to beat tariffs. This has caused many retailers to look to their Chinese suppliers to start contributing towards shipping costs, and not just the tariff impact.

Where your volume justifies it, negotiate index-linked contracts or secure guaranteed capacity with your freight partners, even if it comes at a premium.

This can save orders and protect customer relationships when capacity tightens.

Use Selective Inventory Buffers

You can’t afford to carry extra safety stock for everything.

Use activity-based costing to run the numbers.

Hold extra units only for high-margin products where Chinese inputs are needed and you have long lead times.

The analysis will show you when the carrying cost of that inventory is a better investment than the potential financial hit from a sudden duty hike or production halt.

For carriers and forwarders

The key to winning in this environment is selling stability to your clients.

Secure multiple vessel-sharing agreements now. Map postal-code transit times from alternate gateways and not just the traditional (and common) options.

This lets you quote realistic delivery promises and reroute client freight without missing a beat when a primary lane is disrupted.

The Messy Middle

There isn’t going to be a clear winner nor a quick cease-fire.

The most likely situation for the back half of 2025 is a “messy middle,” where China’s growth cools to roughly 4% but avoids collapse.

U.S. import prices will stay elevated and supply chains will continue to split and fragment.

Third-country hubs in SEA and South America will capture a larger slice of global trade, but this will come at the cost of rising compliance complexity.

For small and mid-sized businesses, this scenario is manageable, provided decisions rest on data and flexible contracts, not on hope for a return to past practice. What worked for you before is dead. Grieve it and move forward with the new reality.

Your next purchase order, freight booking, or carrier bid should take into account this “new normal”.

Price agility, supplier diversity, and strategic inventory are no longer “nice to haves”.

They are the cost of staying in the game.

Shopify’s Back-End Gives You More Power Than You Realize

Here’s some irony for you.

I have regularly used the term “Shopify Effect” to describe a lack of fundamental operational understanding for SMBs and D2C brands.

Because the Shopify system has made app plugins so easy, finding “an app for that” has become the defacto problem solving approach for most store owners.

On top of that, Shopify themselves provides all kinds of pre-built reports that (seemingly) answer all of the questions you might have.

And while it’s all good, and in some cases very good, you are leaving money on the table if you don’t take more control for yourself.

The best thing you can do for your brand is to get more familiar with Shopify’s own query language, ShopifyQL.

ShopifyQL is a purpose-built query language that can turn reporting into a strategic weapon.

Merchants who take on their own reporting can benefit from up to 50 % faster report generation and 60 % gains in analytic efficiency, freeing hours each week for higher-value work.

Why a Commerce-First Query Language Matters

Unlike languages like SQL, ShopifyQL was built for retail questions from day one. That shows up in three ways:

1. Commerce-specific metrics
   Net sales, add-to-cart sessions, checkout progression, and lifetime value calculations are pre-baked, eliminating complex joins
   

2. Retail-ready date shortcuts
   Keywords like bfcm2025, last_quarter, or -30d pull exactly the periods merchants care about. No calendars needed
   

3. Instant funnel views
   With one query you can surface view-to-purchase drop-off rates by product, variant, or channel and pinpoint friction fast.

Here’s a simple example of a query I ran last week to get me all of the raw data I needed to support a D2C brand with their execution:

FROM sales
SHOW 
  day, 
  net_items_sold, 
  gross_sales, 
  discounts, 
  returns, 
  net_sales, 
  taxes,
  total_sales, 
  quantity_ordered, 
  quantity_returned
WHERE 
  line_type = 'product'
GROUP BY 
  day, 
  product_title, 
  product_variant_title, 
  product_variant_sku 
WITH TOTALS
SINCE 
  2025-01-01 
UNTIL 
  2025-05-31
ORDER BY 
  day ASC

Being able to run raw daily data at this level is a huge benefit to finding opportunities in your business.

Most platforms don’t come close to making it this easy to get your numbers in the way that YOU want them.

Query Power That Goes Beyond “WHERE”

Layered logic (AND, OR, NOT) can help you isolate important to understand customer segements.

Example: First-time buyers from Ottawa who used a 10 % code during BFCM.

Comparison chaining (>=, CONTAINS, STARTS WITH) brings up micro-trends such as SKUs trending in one region but stalling in another.

TIMESERIES + COMPARE TO autogenerates clean period-over-period data sets. No spreadsheet wrangling—so year-over-year swings jump off the page.

Built-In Visuals & Notebook Storytelling

A single VISUALIZE keyword in your code can turn the raw output into a bar or line chart inside ShopifyQL Notebooks instantly.

• You ditch third-party BI fees for many day-to-day needs

• Executives see trends, not tables, in live, auto-refreshing decks

• Templates let teams clone best-practice analyses without writing new code

Automation, AI & API Scale Insights While You Sleep

Shopify Flow triggers based on query results can auto-restock low-inventory winners or fire retention emails the moment a VIP’s spend dips.

Natural-language generators like AI2SQL draft complex queries from plain English, flattening the learning curve for non-technical staff.

The GraphQL Admin API pipes ShopifyQL outputs into warehouses, external dashboards, or Slack alerts for a unified data fabric.

Results That Pay for Themselves

Typical wins reported by power users:

• Hours saved weekly by replacing CSV exports & spreadsheet pivots with direct, repeatable queries

• Precision marketing. Targeting segments defined by real behavior, not guesswork

• Inventory cash freed through faster identification of slow movers or surprise hits

• Executive confidence. Live reports that reconcile automatically, reducing “whose numbers are right?” debates

Create Your Own

Open a ShopifyQL Notebook and copy a daily sales report you currently download.

Add one advanced filter or date shortcut, see how quickly the change happens.

Wrap the query in a simple VISUALIZE TYPE=bar to see what’s happening

Iterate weekly, automating the most valuable report via Flow or API.

ShopifyQL isn’t just another reporting tool, it’s a tailored analytics engine built to answer the questions e-commerce operators ask every day.

Invest a few hours mastering its syntax, and you’ll turn data that once felt buried in exports into on-demand intelligence that drives revenue, cuts costs, and outpaces your competitors still using someone else’s app to run their business.

JSON 101: A Simple Guide for D2C Brands and Ecommerce Operators

Data is the lifeblood of your business.

From managing products and processing orders to personalizing customer experiences with AI, exchanging the right information is crucial.

Behind all of the tools and APIs usually sits JSON, the backbone of modern data communication.

This goal of this primer will be to help you understand the core concepts of it, and why it's essential for your eCommerce success.

What is JSON?

JSON (which stands for JavaScript Object Notation), is a lightweight and easy-to-read format for structuring and exchanging data.

Think of it as a universal language that different applications, APIs (Application Programming Interfaces), and AI agents can understand.

Whether you're updating your product catalog on Shopify, integrating a new marketing automation tool, or leveraging an AI powered chatbot, it’s highly likely JSON is working behind the scenes.

The strength of JSON lies in its simplicity.

It's designed to be both human-readable and machine-readable, making it accessible even to those without a deep technical background.

Keys and Values

JSON is built on a simple concept, key-value pairs.

• Key: A string (text in double quotes) that acts as a label or identifier for a piece of data

• Value: The actual data associated with the key.

Here’s a basic example:

"name": "The Classic T-Shirt"

In this case, "name" is the key, and "The Classic T-Shirt" is the value.

The Information You Can Store

JSON values can come in multiple formats, allowing for flexible data representation.

• Strings: Textual data, always enclosed in double quotes. (e.g., "red", "John Doe")

• Numbers: Integers or decimal numbers. (e.g., 29.99, 100)

• Booleans: Represent true or false values

• Arrays: An ordered list of values, enclosed in square brackets []. This is useful for grouping similar items

• Objects: A collection of key-value pairs, enclosed in curly braces {}. Objects allow you to group related information about a single entity

• Null: Represents the absence of a value

JSON in Action for Ecommerce

Let's look at a practical example of how JSON can represent a product in your eCommerce store.

{
  "product_id": "TS-123",
  "name": "The Classic T-Shirt",
  "price": 25.50,
  "in_stock": true,
  "sizes": ["Small", "Medium", "Large", "X-Large"],
  "details": {
    "material": "100% Cotton",
    "color": "White"
  }
}

Here’s how this JSON object breaks down:

We have several key-value pairs. You see these with examples like "product_id": "TS-123" and "price": 25.50.

"in_stock" is a boolean (true or false), indicating the product's availability.

"sizes" is an array, listing all the available sizes for the t-shirt. Again, arrays are “lists” of things.

"details" is a nested object (this means that this object has additional lower levels of detail), containing more specific information about the product's material and color.

This structured format makes it easy for any system to understand everything it needs to know about this particular product.

How is JSON Used in Your eCommerce Business?

Even if you're not writing the code yourself, understanding JSON is beneficial because it's the backbone of many systems you use daily.

Platforms like Shopify, BigCommerce, and Magento use JSON in their APIs.

When you export order data, import product catalogs, or connect a third-party app, the data is often formatted as JSON.

When you connect different software like your eCommerce store with your email marketing platform or a shipping provider, they exchange information using APIs, and JSON is the preferred language for this communication too.

AI-powered tools (from recommendation engines to customer service chatbots), rely on structured data to function.

JSON is the standard way to feed these AI agents the information they need about your products, customers, and orders to provide intelligent and personalized experiences.

For instance, an AI agent might receive a customer's order history in JSON format to recommend relevant products.

Why It Matters to You

For D2C brands and small eCommerce operators, a basic grasp of JSON can be empowering.

It helps you:

• Better understand the tools you use. You'll have a clearer picture of how your different software systems communicate

• Communicate more effectively with the developers that support you. If you need to hire a developer for a custom integration, knowing the basics of JSON will help you articulate your needs

• Troubleshoot minor issues. Sometimes, an error in an integration might be due to a simple formatting issue in a JSON file. A basic understanding can help you spot the problem.

While you may not become a JSON expert overnight, understanding its fundamental structure and purpose is a valuable asset for any modern eCommerce entrepreneur.

It's the language that powers the connected tools and intelligent systems that will drive your business forward.

That’s it for this week. Thanks for being here.