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 fee on,” Jassy told CNBC in an interview.
Trump levied a 10% tariff on all buying and selling companions and an “at the least” 145% tariff on China earlier this week that would influence 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 resolve whether or not to boost costs or take in tariff prices, some Amazon buyers may very well be responding to tariffs by stocking up earlier than any worth hikes — although Jassy says the short-term nature of purchaser knowledge makes it laborious to inform if it is a long-term development.
“Individuals haven’t stopped shopping for, and in sure classes, we do see individuals shopping for forward, nevertheless it’s laborious to know if it is simply an anomaly within the knowledge as a result of it is just some days, or how lengthy it’ll final,” Jassy instructed CNBC.
Amazon CEO Andy Jassy. Photographer: Michael Nagle/Bloomberg by way of Getty Photos
Amazon’s market consists of roughly 9.7 million sellers that contribute to 60% of sales on the platform. In keeping with Fox Enterprise, more than half of the highest sellers on Amazon are based mostly 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. In keeping 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 the reason why Amazon is about to spend $100 billion this 12 months on AI.
In keeping with the letter, Jassy stated that AI presently requires a “substantial capital funding,” however will sooner or later “not be as costly as it’s immediately” as the price of AI chips goes down.
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