1k
499
0
199
388
3471Amazon CEO Andy Jassy says shoppers should brace for higher prices as President Donald Trump’s new tariffs take effect.
“I think they’ll try and pass the cost on,” Jassy told CNBC, referring to Amazon’s third-party sellers, many of whom are either based in China or rely heavily on Chinese suppliers.
Sellers Under Pressure
Third-party sellers make up around 60% of all items sold on Amazon.
With Trump’s sweeping tariffs hitting imports from China and other countries, Jassy said many sellers don’t have extra margins to absorb the costs.
Instead of eating the difference, they’ll raise prices.
“Depending on which country you’re in, you don’t have 50% extra margin that you can play with,” Jassy said.
Amazon is trying to ease the burden with forward inventory buys and renegotiating supplier contracts, but it may not be enough to keep prices down.
Some sellers were caught off guard this week when Amazon abruptly canceled direct import orders for products sourced from China.
Several vendors, especially in home and kitchen goods, were notified via the company’s Vendor Central system that their items would no longer be picked up for shipment.
Shoppers Stockpiling
Jassy noted that consumers are already starting to react. “In certain categories, we do see people buying ahead,” he said.
While it’s still too early to call it a full-blown trend, some customers appear to be stocking up before price hikes kick in.
Meanwhile, a 10-hour glitch in the U.S. Customs system caused confusion and delays for shippers trying to apply the correct tariff rates.
The system failed to recognize exemptions for goods already en route when the new tariffs were announced.
Customs eventually fixed the error, but not before importers were told to file cargo releases without payment paperwork and refile within 10 days.
Uncertainty Hits Small Businesses
The fast-changing trade rules and unclear messaging are creating headaches for small businesses.
Rick Woldenberg, CEO of educational toy company Learning Resources, said he’s putting expansion plans on hold.
“I cannot run my business based on social media posts,” he said. “Instead of planning on growth, I’m talking about surviving. This trade policy can kill me and hundreds of small businesses like me.”
Despite the glitch and the confusion, tariffs on Chinese goods have increased to 145%, and Trump has said tariffs for other countries will remain at a universal 10% rate for now.
The Biden administration had scaled back some tariffs, but Trump’s return to the White House has brought back his more aggressive trade stance.
Amazon Keeps Building Despite Challenges
Jassy said Amazon Web Services, the company’s cloud arm, began diversifying its supply chain five years ago.
That move is now paying off as they avoid overreliance on any one country. Even with higher costs and tariffs, he said, Amazon has no plans to slow down.
“We’re going to keep building,” he said, noting the company expects to invest up to $100 billion this year in AI and cloud infrastructure.
For now, though, shoppers might want to grab what they need before prices climb.
“People have not stopped buying,” Jassy said. But with the tariff landscape changing by the week, it’s anyone’s guess how long that will last.
1k4990199
3883471
