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Amazon is preparing for a wave of higher prices as President Donald Trump’s tariff policies on Chinese imports begin to take effect again. CEO Andy Jassy recently warned that these trade measures could make many everyday products more expensive for U.S. shoppers.
Trump’s Tariffs and Their Renewed Impact on Retail
President Trump’s administration has reinstated tariffs on a wide range of Chinese goods as part of his broader effort to reduce the trade gap and support American manufacturing. These import taxes raise costs for companies that rely on Chinese-made products — and those costs are expected to ripple down to consumers.
Jassy addressed the issue during a CNBC interview, saying that while Amazon is working hard to keep prices low, the tariffs create significant pressure across the retail industry.
Amazon’s Strategy to Keep Prices in Check
According to Jassy, Amazon is taking several steps to protect customers from sudden price jumps. He explained that some businesses, including Amazon’s third-party sellers, don’t have large enough profit margins to absorb the new costs.
To manage this, Amazon is:
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Canceling select orders from suppliers in China and Southeast Asia
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Stocking up on high-demand products ahead of cost increases
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Renegotiating deals with suppliers to get better rates
Some of the first affected products include beach chairs, scooters, and air conditioners — items Amazon typically buys in bulk and resells directly to U.S. customers.
Third-Party Sellers May Pass Costs to Consumers
Roughly 60% of sales on Amazon come from third-party sellers, many of whom depend on Chinese factories for their inventory. With the return of Trump’s tariffs, these sellers could face tough choices: raise prices, reduce stock, or switch suppliers.
Jassy predicted that many would end up increasing their prices just to stay in business.
Signs That Shoppers Are Buying Ahead of Price Hikes
Amazon is already seeing early signs of changes in how customers shop. Some buyers are purchasing more than usual, especially in categories likely to be hit by tariffs. Jassy noted that while demand hasn’t dropped, the company is watching closely to see how long this behavior continues.
This kind of activity — where shoppers "stock up" ahead of expected inflation — may grow more common if tariffs remain in place throughout 2025.
Amazon’s Long-Term Plan to Manage Rising Costs
In his most recent shareholder letter, Jassy explained that Amazon is focusing on operational efficiency to offset cost increases. This includes:
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Smarter inventory planning
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Improved supply chain processes
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Better partnerships with global vendors
The company’s goal is to protect its customers as much as possible while navigating the changing trade landscape under the Trump administration.
