Chinese companies that sell goods on Amazon are preparing to raise prices for the United States or leave the market because of tariffs imposed by President Donald Trump, who announced an increase from 104% to 125% on Wednesday.
Chinese companies that sell goods on Amazon are preparing to raise prices for the United States or leave the market because of tariffs imposed by President Donald Trump, who announced an increase from 104% to 125% on Wednesday.
“It will be very difficult to survive in the US market,” Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, which represents more than 3,000 Amazon sellers, told Reuters. “So for all of us who are doing cross-border e-commerce today, this is really an unheard-of blow.”
According to e-commerce provider SmartScout, China is home to about half of Amazon’s sellers. In the southern city of Shenzhen alone, there are more than 100,000 Amazon businesses registered, generating $35.3 billion in annual revenue.
China is also home to the production bases of other major e-commerce platforms such as Shein and Temu. According to the State Council of China, imports and exports related to cross-border e-commerce amounted to $358 billion last year.
For example, Dave Fong, whose products range from school bags to Bluetooth speakers, has raised prices in the U.S. by 30%, reduced inventory levels and cut advertising costs on Amazon, which once accounted for 40% of his U.S. revenue. “For us, like for anyone else, you can’t rely on the U.S. market, that’s clear,” Fong said. “We have to reduce investment and put more resources into regions like Europe, Canada, Mexico and the rest of the world.”
No other country even comes close to the US's consumption capacity, which significantly limits the production that the rest of the world can absorb and raises the risk of escalating price wars between Chinese exporters, reducing their profitability.
Given the severe impact on China's small businesses and manufacturers, the tariffs risk leading to a rapid rise in unemployment in China, Wang said.
Yesterday, Bloomberg reported that Amazon is canceling orders for products made in China . The products the company buys directly from sellers account for about 40%. The rest of the company's sales are made by independent sellers, who essentially rent Amazon a marketplace, paying the company commissions and fees for logistics and advertising.
Trump initially imposed a 54% tariff on China. In response, China said it would impose an additional 34% tariff on all American goods starting April 10.
The White House then announced that it would increase tariffs on Chinese imports by an additional 50%, bringing the total to 104%. China will retaliate with tariffs of 84% on American goods.
On April 9, Trump said he would raise tariffs on China to 125%.
Trump also signed an executive order closing a loophole for cheap goods from China , which takes effect on May 2. Previously, packages worth up to $800 enjoyed a “minimal” exemption from additional duties, allowing foreign online retailers like Temu and Shein to sell super-cheap goods to American consumers.
