NEW YORK — Amazon shoppers can likely expect some prices to rise due to the ongoing global trade war, the company’s CEO admitted.
Andy Jassy, speaking on CNBC, acknowledged that online retailers’ third-party sellers would be impacted by tariffs. He mentioned that these costs would likely be passed on to consumers, highlighting the limitations sellers face in adjusting margins.
President Donald Trump recently announced a temporary pause on reciprocal tariffs for 90 days, after imposing tariffs ranging from 11% to 50% on several countries. These measures were described as not truly reciprocal in nature.
Despite the pause on certain tariffs, the trade war between the US and China remains tense. Trump escalated tariffs on Chinese imports to 125%, prompting China to respond with 84% tariffs on US imports. These developments are anticipated to have significant repercussions on various sectors.
However, Jassy said that Amazon is “doing everything we can to try and keep prices the way they’ve been for customers – as low as possible.” He said the company has done some “strategic forward inventory buys” and has renegotiated terms with sellers so customers “have lower prices.”
So far, Jassy said the company hasn’t seen changes in customer behavior in a “meaningful way,” only revealing Amazon has noticed some “people buying ahead” as well as maintaining their purchasing habits recently triggered by inflation.
“Customers have gotten more careful and whenever they can trade down on price, they do. Whenever they can find a bargain, they do,” he said.
It’s a stark contrast with its largest rival, Walmart, which pulled its financial guidance on Wednesday for the quarter because of uncertainty over the impact of tariffs. Still, the retailer maintained that sales during the quarter will grow by up to 4% and reaffirmed its full-year sales and profit guidance.
Amazon (AMZN) shares fell 3% at the opening, mirroring a larger sell-off in the markets.
