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In a recent interview with CNBC’s Andrew Ross Sorkin, Amazon CEO Andy Jassy addressed the ongoing implications of former President Donald Trump’s extensive tariff policies on the retail giant and its network of third-party sellers. Jassy acknowledged that the company is still assessing the full impact of these tariffs but anticipated that sellers might need to transfer some of these additional costs to consumers.
“I understand the complexities involved; depending on the country, sellers don’t have a significant margin to accommodate these increases,” Jassy explained. He highlighted the likelihood that sellers would attempt to recover costs through pricing adjustments.
In light of the tariffs announcement, Amazon is taking proactive measures to mitigate potential price increases on its platform. According to Jassy, the company has engaged in “strategic forward inventory buys” and is actively renegotiating terms on several purchase orders to help keep pricing competitive.
This week, Amazon has started to cancel certain direct import orders for goods sourced from Chinese vendors, following the tariff announcement. Reports suggest that some suppliers, particularly in the home goods and kitchen accessories sectors, faced cancellations shortly before their products were slated for shipment.
Furthermore, Jassy noted an emerging trend among consumers who are starting to stockpile goods in anticipation of rising prices. However, he cautioned that more time is needed to determine whether this behavior is indicative of a broader panic or merely a short-term anomaly.
“While we have not seen a decline in consumer spending, certain categories do reveal signs of advance purchasing, but as of now, it’s difficult to discern the longevity of this trend,” Jassy remarked.
Last week, Trump enacted a comprehensive reciprocal tariff strategy, which he later adjusted to establish a universal 10% tariff rate across all trade partners, with exceptions for China. This dynamic tariff landscape may inadvertently increase operational costs for businesses striving to expand infrastructures, particularly those investing in AI technologies.
Amazon’s cloud computing division stands to gain substantially from the growing demand for AI services. In response, the company has committed to investing up to $100 billion this year to enhance its AI capabilities.
Looking ahead, Jassy revealed that Amazon Web Services has been working on diversifying its supply chain since approximately five years ago, which allows for sourcing components from various international markets rather than relying solely on one country.
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