Shares in Amazon (AMZN) were lower today as Chinese sellers on the e-commerce site threatened to hike their prices in retaliation for President Trump’s “unprecedented” tariffs strategy.
Raise Prices or Leave
According to a report from Reuters, Chinese companies selling products on Amazon are planning to either raise their prices to American consumers or even quit the U.S. market altogether. It was reported that some sellers had already hiked prices by up to 30% and lowered spending on Amazon advertising fees. Other markets they are looking to switch their products to include Canada, Mexico and Europe.
This comes after President Trump last night paused his reciprocal tariffs on every country except for China which is now facing a phenomenal 125% tax rate on its imports into the U.S. The trade conflict between the two largest economies in the world could even escalate further.
Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, China’s largest e-commerce association, told Reuters that the “entire cost structure” of Chinese suppliers was being completely overwhelmed. The association represents over 3,000 Amazon sellers which are being hit by customs delays and higher logistics and supply chain costs.
“This isn’t just a tax issue,” he said. “It will be very hard for anyone to survive in the U.S. market. It is an unprecedented blow.”
Amazon Being Hit
It will also hit Amazon hard with its shares down around 2% in pre-market trading.
China is home to around half of Amazon’s sellers, with over 100,000 Amazon businesses registered in the southern city of Shenzhen alone, generating annual revenues of $35.3 billion, according to e-commerce services provider SmartScout.
Figures from China’s State Council also reveal that imports and exports involving cross-border e-commerce were worth $358 billion last year. China also hosts the manufacturing bases of major e-commerce platforms like Shein and Temu.
Is AMZN a Good Stock to Buy Now?
On TipRanks, AMZN has a Strong Buy consensus based on 46 Buy and 1 Hold rating. Its highest price target is $306. AMZN stock’s consensus price target is $263.81 implying an 38.05% upside.
