[Text by Observer Network, Shao Yun]
The US President Trump recently announced the so-called "reciprocal tariffs", causing global market volatility and affecting the lives of ordinary Americans. Local time on the 10th, Andy Jassy, CEO of American e-commerce giant Amazon, warned that high tariffs imposed by the US on China may lead third-party sellers to pass the costs "entirely" onto American consumers. He said that they have preliminarily observed囤货 behavior among some buyers.
Jassy accepted a live interview from CNBC on the 10th, stating that Amazon is still digesting the impact of Trump's tariff policy. When asked whether third-party sellers on the platform would try to pass on the additional costs "entirely," Jassy said, "Yes, I think they will try to do so... Depending on the country, you don't have 50% extra profit margin to maneuver."
Although Jassy cautiously stated that they have not yet seen any meaningful changes in buyer behavior, he confirmed that the platform has observed consumers "pre-purchasing" needed items to cope with price increases. "People haven't stopped buying, and in certain categories, we do see people purchasing ahead of time. But it's hard to determine if this is just an anomaly in the data or how long this trend will continue, as it's only been a few days so far."
Jassy also said that Amazon has had discussions with the Trump administration regarding tariff issues, conveying concerns from the business side. He mentioned that the Trump administration "is also aware of these concerns."
Screenshot of Jassy's interview with CNBC
CNBC pointed out that third-party sellers account for approximately 60% of all product sales on Amazon. Many of these sellers either import from China or are Chinese sellers themselves.
According to the "2024 Amazon Seller Status Report" released by Jungle Scout last year, over 70% of Amazon sellers and brands source their products from China. The second and third largest sources are the United States and India, but their shares are only 30% and 14%, respectively. Marketplace Pulse's data shows that by November 2024, for the first time, Chinese sellers accounted for more than 50% of Amazon's platform, while the share of American sellers dropped to about 45%.
Snapshot of the "2024 Amazon Seller Status Report" Jungle Scout
On the other hand, the 40% of Amazon's own products also have many purchased at wholesale prices from factories in China to reduce procurement costs. Amazon's annual report released in February this year stated that Chinese suppliers "provided us with a significant portion of components and finished products."
In this model, Amazon must bear the transportation and tariff costs itself. Trump's high "reciprocal tariffs" on China undoubtedly have a major impact. Jassy told CNBC on the 10th that in response to the latest tariff policies, the company has made some "strategic forward-looking inventory purchases" and hopes to renegotiate some purchase order terms to ensure low-priced self-operated products.
Previously, according to a report by Reuters on the 10th, facing the destruction caused by Trump's tariff chaos, Chinese sellers selling goods on Amazon are preparing to raise prices in the U.S. or simply exit the U.S. market and turn to explore other new markets.
"It has become very clear that we can no longer rely solely on the U.S. market," said one Chinese seller. "We must reduce our investment in the U.S. and allocate more resources to Europe, Canada, Mexico, and other parts of the world."
A report by Fortune magazine on September 9th expressed concern that American sellers on Amazon who depend on Chinese sources may face mass closures due to tariff impacts. The report used an example of a small Idaho-based company with $5 million in annual sales, which imports goods from China and sells special needs children's sensory swings and other products through the Amazon platform, while providing online tutorials.
Operator Casey Ames said that if calculated at 104%, the tariff on his current batch of pending shipments would skyrocket from $4,707 to $190,000, which was "absurd." Ames also said that he tried to find suppliers in the U.S. several years ago but found that the quotes were even higher than the retail prices of his company's products; if he couldn't find alternative sources, he would be forced to close the physical product business and lay off at least half of his employees.
On the sales side, the negative effects of tariffs have already begun to show. According to a report by Reuters on August 8th, anxious American consumers could be seen "madly stocking up" in Costco, Walmart, and other American stores over the past two weeks.
Angelo Barrio, 55, a retired garment industry worker. This week, he stockpiled toothpaste, soap, drinking water, and rice at Costco. At Walmart, he bought two bottles of olive oil, bringing his total stockpile to 20 bottles.
Talking about Trump's pressure tactics, Barrio felt sorry for China's plight and criticized Trump's tariff tricks as "stirring up trouble and creating chaos." "They (China) didn't do anything wrong but were punished unjustly," Barrio said. "I've always been grateful to them for providing us with various products at such affordable prices."
This article is an exclusive contribution by Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7492014748859433507/
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