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Amazon’s CEO, Andy Jassy, indicated on Thursday that sellers on the platform are likely to respond to recent tariffs imposed by President Donald Trump by increasing prices for consumers. In an interview with CNBC, Jassy stated, “I think they [sellers] will try and pass the cost on.”
This statement comes in light of Trump’s recent decision to impose a 10% tariff on imports from all trading partners, alongside a steep 145% tariff specifically targeting China. These measures could significantly affect prices for consumers, as a substantial portion of goods sold on Amazon—estimated at over 70%—are imported from China.
As merchants deliberate on whether to absorb the additional costs or raise prices, there appears to be a trend among Amazon shoppers to stock up on items before potential price increases take effect. However, Jassy expressed caution, noting that the short-term nature of consumer purchasing behavior makes it difficult to assess whether this is merely a temporary spike or indicative of a longer-term trend. “People have not stopped buying, and in certain categories, we do see people buying ahead, but it’s hard to know if it’s just an anomaly in the data,” he explained.
Amazon’s platform houses around 9.7 million sellers, accounting for approximately 60% of sales on the site. Notably, more than half of the top sellers originate from China, according to reports from Fox Business.
In light of these developments, Jassy shared that Amazon is taking proactive measures by making “strategic” inventory purchases and renegotiating terms for certain purchase orders in direct response to the tariffs. Reports from Bloomberg indicated that the company canceled orders for various products, including beach chairs and scooters, from Chinese sellers shortly after the tariff announcement.
Investments in Artificial Intelligence
In addition, Jassy unveiled his annual shareholder letter on Thursday, which detailed Amazon’s intended investment of $100 billion in artificial intelligence throughout the year. Jassy emphasized that while AI development entails “substantial capital investment” at present, he anticipates that future advancements will reduce these costs as AI technology evolves and becomes more accessible.
This strategic pivot underscores Amazon’s ongoing commitment to innovation and adaptation in a rapidly changing economic landscape, highlighting both the challenges posed by external tariffs and the company’s focus on future technologies.
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