Chinese companies that sell to US customers on Amazon are reportedly preparing to raise prices or quit the US market because of tariffs imposed by President Trump. Amazon CEO Andy Jassy has meanwhile confirmed that he expects the cost of tariffs to be passed on to US buyers.
Reuters talked to several individual sellers and a Chinese trade association that represents over 3,000 Amazon sellers for an article published today. "It'll be very hard for anyone to survive in the US market" because "the entire cost structure gets entirely overwhelmed" by the tariffs, Reuters was told by Wang Xin, who leads the Shenzhen Cross-Border E-Commerce Association. Xin also "not[ed] the tariffs could also lead to customs delays and higher logistics costs."
Trump increased tariffs on China imports to 125 percent yesterday even as he announced a 90-day pause on tariff hikes affecting other countries. The total tariffs are 145 percent because the newly raised tariff "comes on top of a 20 percent fentanyl-related tariff that Trump previously imposed on China," CNBC wrote today.
It's no surprise that tariffs of this size would have a big impact on Chinese sellers, who have been courted by Amazon for years and are a source of cheap products for US buyers (though those products are often of poor quality).
Amazon declined to comment about the tariffs' impact on Chinese sellers when contacted by Ars today. But Jassy told CNBC that he expects sellers to pass the cost of tariffs on to consumers.
"I'm guessing that sellers will pass that cost on... depending on which country you're in, you don't have 50 percent extra margin that you can play with so I think they'll try and pass the cost on," Jassy said.