Amazon CEO Andy Jassy stated on Thursday that Amazon sellers would most likely reply to President Donald Trump’s tariffs by elevating costs for customers.
“I believe they [sellers] will attempt to go the associated fee on,” Jassy told CNBC in an interview.
Trump levied a 10% tariff on all buying and selling companions and an “not less than” 145% tariff on China earlier this week that would affect consumer prices. The tariff information has thrown Amazon sellers right into a panic as a result of nearly all of items on the platform, as much as 70% of products per Wedbush Securities estimates, come from China.
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Whereas sellers determine whether or not to boost costs or soak up tariff prices, some Amazon customers might be responding to tariffs by stocking up earlier than any value hikes — although Jassy says the short-term nature of customer knowledge makes it exhausting to inform if it is a long-term development.
“Folks haven’t stopped shopping for, and in sure classes, we do see individuals shopping for forward, nevertheless it’s exhausting to know if it is simply an anomaly within the knowledge as a result of it is only a few days, or how lengthy it should final,” Jassy advised CNBC.
Amazon CEO Andy Jassy. Photographer: Michael Nagle/Bloomberg through Getty Pictures
Amazon’s market consists of roughly 9.7 million sellers that contribute to 60% of sales on the platform. In line with Fox Enterprise, more than half of the highest sellers on Amazon are primarily based in China.
Jassy advised CNBC that Amazon has made some “strategic” stock buys and is attempting to renegotiate phrases for some buy orders in response to tariffs. In line with Bloomberg, Amazon canceled orders for seaside chairs, scooters, air conditioners, and different merchandise from quite a few Amazon sellers in China final week after Trump announced his tariff plan on April 2.
Amazon Is Nonetheless Spending on AI
Jassy additionally launched his annual shareholder letter on Thursday, outlining the explanation why Amazon is ready to spend $100 billion this yr on AI.
In line with the letter, Jassy stated that AI at the moment requires a “substantial capital funding,” however will someday “not be as costly as it’s as we speak” as the price of AI chips goes down.
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