There's a bunch of businesses arbitraging the differential between warehousing Chinese goods in the US vs shipping them directly with very cheap postage. Wish, DHGate, AliExpress, a bunch of sellers on Amazon, etc., but I don't think this will kill them. At least not all of them; there will likely be consolidation to bigger players and players that already have US-based warehousing and distribution in place.
There's already a number of sellers that compete on shipment speed, rather than just on price. Likewise, there are Fulfilled By Amazon sellers that import from China in bulk and warehouse it with Amazon. So, they can charge an extra 5% or whatever because it will arrive in 2-5 days from a warehouse in California rather than in 2 weeks for goods coming from China. I suspect this will push more business their way rather than completely destroy this market, but it's going to be a big hit.
I don't think it's entirely a terrible thing to put a realistic price on individually importing goods. I've been buying a lot of import stuff for electronics and guitar projects lately, and I'm astonished at how cheaply a bag of electronics parts can be shipped from China. It's a tiny bag of parts coming from the other side of the world, and it's still cheaper than buying locally. That doesn't seem like it should be so, compared to bulk importers that bring the goods over in container-sized quantities so they can ship it to individuals from the same continent.
Amazon fought state sales tax until the writing was on the wall, then Amazon caved and we got overnight shipping instead.
I wouldn't be surprised if something similar happens. In Europe hobbyking, banggood et al opened European warehouses once VAT enforcement became a problem.
The big chinese retailers will start competing with Amazon, which is somewhat ironic since Amazon already acts as the US warehouse for many Chinese products. Good riddance to dropshippers though.
Amazon is a very big fan of this change. They've been arguing in favor of this for years. The postage welfare program enabled Alibaba et al. to inexpensively lob attacks into Amazon's primary shopping market, from China, where Amazon can't go to compete. It's a big win for Amazon and most domestic US manufacturers and retailers.
