Source: Tiger Scent APP
As the high-level economic and trade talks between China and the US achieved substantive progress and both sides agreed to ease tariffs on each other's goods, Amazon became one of the biggest winners. On May 12th, Amazon's stock price surged by 8.07%, with its intraday high reaching the highest level since March 2025.
As the largest e-commerce platform in the United States, Amazon is extremely reliant on electronic products and consumer goods from China. The previous tax rate as high as 145% was undoubtedly unacceptable for Amazon. As a result, not long ago, Amazon and the White House staged a "verbal spat."
Media reports revealed that Amazon planned to label the "tariff cost" in product pages. This rumor triggered Trump's anger, who directly called Bezos to reprimand him.
The White House press secretary Letitia also described this action as "hostile political behavior" during a press conference and emphasized that Amazon had not communicated with the government.
Since retiring, Bezos naturally did not handle relevant matters directly; he was busy exploring space. According to regulatory documents, Bezos recently cashed out nearly $5 billion. Amazon is just his "cash cow" for broadening life boundaries, and specific matters have been handed over to his successor, Andy Jassy. Amazon responded that it only considered testing tariff displays on Amazon Haul, and the function has not yet been launched.
Now, this function is temporarily unnecessary. Under various favorable factors, Amazon's stock price not only recovered but also reached a short-term new high.
It seems that no one can shake Amazon's position.
One
As we all know, "Made in China" provides almost all categories of affordable products globally, covering every aspect of social life, and is the world's largest supply base.
Statistics show that 60% to 70% of products on Amazon are made in China, and in 2024, Chinese merchants accounted for more than 50% of Amazon's merchants. Considering that there are still many Chinese-funded companies registered in the U.S. for local operations, the actual proportion of Chinese merchants is even higher.
For a long time, Amazon has tended to support sellers who intend to build brands, emphasizing service and product quality, and paying less attention to unbranded white-label sellers. However, with severe inflation in the U.S. after the pandemic, prices kept rising, and previously extravagant Americans became price-sensitive, tending to buy "more economical" goods, which allowed "international version of Pinduoduo" Temu to seize the opportunity and quickly rise to prominence.
In 2024, Temu and Shein combined had a total of 780 million downloads worldwide, more than three times that of Amazon. Temu estimates that its GMV on the platform exceeded $520 billion in 2024. It should be noted that Temu is the most popular shopping app among American users aged 18 to 24. Capturing the minds of young people means having greater chances of success in the future.
Such intense competition forced Amazon, as the pioneer of e-commerce, to take precautions.
Previously, Amazon had a price comparison monitoring mechanism. If a merchant's price on Amazon was higher than other platforms, they would face penalties or even closure of their stores. In 2023, Amazon had to remove Temu from the price comparison system because following the original rules would require closing down many stores. They could only force sellers to match prices on Temu in other ways. There were also rumors that Amazon once required major sellers to choose between themselves and Temu.
Besides forcing sellers to align, Amazon itself also directly "learned" from Temu, opening its doors to white-label merchants.
In November 2024, Amazon launched the low-price section Amazon Haul, focusing on white-label goods priced under $20 with additional discounts for orders above a certain amount. According to official announcements, the initial batch of sellers for Haul was invited by Amazon, with fulfillment centers set up in Dongguan. Sellers handle product selection, while Amazon manages logistics, traffic, and other operational processes. Compared to the main site, delivery times for Haul section products can last up to 1-2 weeks.
Although embarking on the path of competing on price, Amazon has its "justification," emphasizing that branding and affordability do not conflict. Sellers can focus on high-priced brands, and they can also work on low-priced ones. Amazon executives stated that company research proved customers are willing to wait longer for better prices.
The price war is indeed the most effective promotional tool. During last year's Black Friday, the Haul section saw over two thousand best-selling items, with some experiencing stockouts.
Two
At the height of the new round of tariff wars, Amazon CEO Andy Jassy pessimistically believed that "none of us knows exactly when or how tariffs will be determined."
Statistics show that in April, Amazon sellers had already raised prices for nearly a thousand products, with an average increase of nearly 30%. Goldman Sachs estimated that Amazon's U.S. product costs may increase by 15%-20% due to tariff policies, with global product costs increasing by 9%-12%.
When the Haul section, supported by Chinese sellers, was hit the hardest, the buyers of Haul were precisely Trump's supporter group.
Although Trump himself is a millionaire, his base supporters are mostly "rednecks." "Rednecks" in the U.S. are generally middle-to-low-income groups and also an important customer base for white-label products. Statistics show that in 2024, disposable income for U.S. middle-to-low-income households dropped by 12%, with over 60% of Temu platform users having household incomes below $50,000 annually. These groups are also users of Haul.
Amaron's move to mark tariff costs in the low-price section clearly told consumers: don't blame tech giants for price increases; blame Trump's policies instead.
Although pushed onto the "price war" battlefield by later entrants, it cannot be concluded that Amazon has lost its initiative.
From Amazon's first-quarter 2025 financial report, it remains the industry leader. According to the report, Amazon's net sales for this quarter were $155.67 billion, a 9% increase year-over-year; net profit was $17.127 billion, a 64% increase year-over-year. Specifically, online store net sales were $57.407 billion, a 5% increase year-over-year; physical store business net sales were $5.533 billion, a 6.4% increase year-over-year. Subscription services and AWS net sales also maintained growth trends.
On the conference call, Andy Jassy showed a relatively calm attitude, focusing again on platform scale advantages and pricing. He said, "There may be no time more critical than now for us to work hard to keep prices low for consumers."
Jassy reassured Wall Street, stating that consumer demand for the platform shows no signs of weakening, with some product purchases actually increasing, likely due to customers stocking up in anticipation of price hikes. Amazon has also conducted significant advance procurement, and third-party sellers have also pre-stored inventory, ensuring that product prices will not skyrocket in the short term.
He believes that during turbulent times, consumers tend to prefer more familiar and trusted platforms. Amazon is confident in maintaining stable supply compared to competitors and achieving逆势growth, gaining larger market share.
Looking at the stock price, Wall Street listened to what Jassy had to say.
Three
Cross-border e-commerce professionals have complex feelings about Amazon. Its strict management mechanisms force sellers into internal competition and cost reduction. The easily triggered penalty mechanism has caused many large sellers to experience store closures, making them walk on eggshells during operations.
To some extent, if it weren't for Amazon's relentless pressure, the rise of independent sites and Temu might not have been so rapid.
At a time when Sino-US relations are becoming tense, Amazon will certainly first stabilize American consumers' emotions, protect its own interests, and transfer costs to Chinese sellers.
During the earnings conference, Jassy mentioned Amazon's scale advantage multiple times, emphasizing that the platform has over 2 million sellers, and each seller adopts different measures to cope with tariffs. Some sellers may be willing to bear tariff costs for consumers to seize market share. Goldman Sachs predicts that if Amazon cannot effectively pass on tariff costs, annualized profits may face losses of up to $10 billion. Based on such scale calculations, Chinese sellers' profit margins will be significantly squeezed.
Previously, Walmart was summoned by China's Ministry of Commerce for requiring Chinese suppliers to bear tariff costs. With this precedent, Amazon may only adopt covert inducements and will not openly transfer costs.
"Over the past six years or so, we have been working hard to diversify product origins." Although not directly naming anyone, this statement indirectly indicates that Amazon does not rely on China.
After the tariff alert was temporarily lifted, Wall Street investment banks believe that lower tariffs mean reduced costs for Amazon, thus improving its retail profit margin.
Moreover, Amazon's future may not depend solely on e-commerce.
This year, Amazon expects capital expenditures to reach hundreds of billions of dollars, most of which will be used for AI-related projects. Model training remains the main cost, and Amazon is internally developing over 1,000 generative AI applications, covering programming, search, shopping, and other fields, building an "AI-first" ecosystem.
Jassy believes that although AI is expensive in the short term, with technological advancements and increased competition in the chip market, usage costs will eventually decrease. He also mentioned that AI revenue grows at over triple-digit rates annually, with current annualized revenues reaching billions of dollars, and current investments will yield long-term value in the future.
As an early leader of AWS, Jassy used AWS's development journey to illustrate Amazon's layout in the AI field. After all, if AWS had not significantly reduced computing and storage costs, allowing Amazon to improve the online experience of small and medium-sized enterprises through infrastructure leasing, it would not have achieved today's position in the e-commerce sector.
Amazon believes that although AWS is the industry leader with annual revenue exceeding $117 billion, there is still huge room for imagination. Currently, more than 85% of global IT spending remains local. Infrastructure and data migration to the cloud are necessary to fully leverage AI's capabilities, and the two are symbiotic. In the first quarter, Amazon signed major clients like Adobe and Uber. "In the next decade, cloud migration will no longer be just a technical option but a survival necessity for businesses to maintain competitiveness."
Facing the ever-changing policies of the Trump administration, American companies may complain verbally about being affected, but their actual benefits will not be overturned. In contrast, the challenges faced by the vast majority of Chinese sellers are the greatest.
Original article: https://www.toutiao.com/article/7504854682930659880/
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