Amazon stays steady, but looming tariffs unsettle sellers
Amazon addresses sellers' concerns about the impact of tariffs imposed by Donald Trump's administration on e-commerce activities. The company reassures that it has not yet seen a drop in demand or a significant increase in retail prices. However, analysts caution that these effects may only be a matter of time.
The new American tariffs on imports from China, which can reach as high as 145 percent, are forcing major corporations, including Amazon, Walmart, and Apple, to urgently reorganize supply chains and seek cost savings. Amazon, a giant in the U.S. e-commerce sector, maintains that demand remains stable for now.
Amazon reassures, but the effects of tariffs may impact sellers
However, the company acknowledges an increase in purchases in certain categories, likely due to actions by external sellers building up inventory before the tariffs are fully implemented. Analysts caution that temporary measures like stockpiling inventory will only postpone sellers' challenges short-term.
"I don't think the inventory will last more than half a year," estimates Gil Luria of D.A. Davidson, a financial services firm in the U.S. "If we get past the next six months and we're still as uncertain as we are today ... then Amazon will have to take actions that are less palatable. It's gonna have to let some higher prices flow through, take some lower margins structurally, and push its merchants to absorb lower margins," he says in an interview with Reuters.
Apple has announced that tariffs could increase its costs by nearly one billion dollars this quarter. CEO Tim Cook announced a restructuring of the supply chain. "Assuming the current tariff rates remain unchanged by the end of the quarter and no new tariffs are added, we estimate this impact will raise our costs by 900 million dollars," Apple's CEO stated on Thursday during a quarterly financial results teleconference.
An additional challenge for Amazon arises today as the "de minimis" rule expires on May 2. This customs exemption for low-cost shipments from China had been eagerly used by external sellers. CNN reports that nearly 4 million such shipments are currently processed in the U.S. The expiration of these benefits may make the real effects of tariffs on Chinese imports more apparent to many Americans.
