Amazon CEO Andy Jassy stated that third-party sellers on Amazon are likely to pass the cost of tariffs onto consumers. In an interview with CNBC, Jassy explained that these sellers may not have sufficient margins to absorb the tariffs themselves. Therefore, they will attempt to transfer the cost to buyers. Jassy also mentioned that Amazon is taking steps to maintain low prices for its customers, such as strategic forward inventory purchases and renegotiating terms for better pricing.
Due to the tariffs being relatively new and subject to change, Amazon has not observed any significant shifts in consumer behavior yet. Some customers might be purchasing ahead to avoid potential tariff increases, but this remains uncertain. Regarding Amazon’s AWS cloud computing business, Jassy noted that the company sources components globally and diversified its supply chain significantly five years ago. Despite this diversification, the high demand for AWS and AI continues to grow without any noticeable decrease.
Reports indicated that Amazon canceled orders from several vendors in China and other Asian countries following President Donald Trump’s announcement of planned tariffs on goods from over 180 countries. Additionally, due to the tariffs, Chinese sellers on Amazon face the decision to either increase prices or leave the platform. Among five sellers interviewed by Reuters, three considered raising prices for their U.S.-bound exports, while two planned to exit the market. — new from PYMNTS.com