Amazon CEO Andy Jassy stated on Thursday that Amazon sellers would most likely reply to President Donald Trump’s tariffs by elevating costs for shoppers.
“I feel they [sellers] will try 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 “no less than” 145% tariff on China earlier this week that might affect consumer prices. The tariff information has thrown Amazon sellers right into a panic as a result of the vast majority of items on the platform, as much as 70% of products per Wedbush Securities estimates, come from China.
Associated: Amazon CEO Andy Jassy Says There’s One Trait That Contributes ‘an Embarrassing Amount’ to Being Successful
Whereas sellers resolve whether or not to boost costs or take up tariff prices, some Amazon customers could possibly be responding to tariffs by stocking up earlier than any value hikes — although Jassy says the short-term nature of purchaser information makes it laborious to inform if it is a long-term pattern.
“Individuals haven’t stopped shopping for, and in sure classes, we do see individuals shopping for forward, however it’s laborious to know if it is simply an anomaly within the information as a result of it is only a few days, or how lengthy it’ll final,” Jassy instructed CNBC.
Amazon CEO Andy Jassy. Photographer: Michael Nagle/Bloomberg by way of Getty Photographs
Amazon’s market consists of roughly 9.7 million sellers that contribute to 60% of sales on the platform. Based on Fox Enterprise, more than half of the highest sellers on Amazon are primarily based in China.
Jassy instructed CNBC that Amazon has made some “strategic” stock buys and is attempting to renegotiate phrases for some buy orders in response to tariffs. Based on 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 the explanation why Amazon is about to spend $100 billion this yr on AI.
Based on the letter, Jassy stated that AI at present requires a “substantial capital funding,” however will someday “not be as costly as it’s at present” as the price of AI chips goes down.
Associated: Amazon CEO Andy Jassy Says Earning Employees’ Trust Takes More Than ‘Being Nice’ — Here’s How He Does It
