Chinese sellers on Amazon are preparing to leave the US market due to new Trump tariffs
Kyiv • UNN
Chinese companies trading on Amazon are preparing to raise prices for American consumers. The reason is the increase in customs tariffs announced by Donald Trump.
Chinese companies trading on Amazon are preparing to raise prices for American consumers or even exit the US market amid a sharp increase in customs tariffs announced by the country's president, Donald Trump. This is reported by Reuters, writes UNN.
Details
On Wednesday, Trump announced his intention to increase tariffs on Chinese imports to 125% from the current 104%, which could further escalate the economic confrontation between the US and China.
"It's not just a taxation problem, the problem is that the entire cost structure turns out to be completely overloaded," said Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, which represents more than 3,000 Amazon sellers.
"It will be very difficult for anyone to survive in the US market," she said, noting that tariffs could also lead to customs delays and higher logistics costs. "So for all of us who are engaged in cross-border e-commerce today, this is a truly unprecedented blow."
According to the publication, some sellers are looking to raise prices in the US, while others are looking for new markets.
According to e-commerce service provider SmartScout, about half of Amazon's sellers are located in China: more than 100,000 Amazon businesses are registered in the southern city of Shenzhen alone, with annual revenue of US$35.3 billion.
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China is also home to the production bases of other major e-commerce platforms such as Shein and Temu. According to China's State Council, imports and exports related to cross-border e-commerce totaled 2.63 trillion yuan (US$358 billion) last year.
No other country comes close to the US level of consumption, which significantly limits the volume of production that the rest of the world can consume and increases the risk of escalating price wars between Chinese exporters, which reduces profitability.
Of the five sellers Reuters spoke to, three said they would try to raise prices on their exports to the US, while two plan to leave the market altogether.
Dave Fong, whose products range from school backpacks to Bluetooth speakers, said on Thursday that he raised prices in the US by 30% and will also allow for lower inventory levels and advertising costs on Amazon, which once accounted for 40% of his US revenue.
"For us and everyone else, we can't rely on the US market, that's absolutely clear," Fong said. "We need to cut investment and put more resources into regions like Europe, Canada, Mexico and the rest of the world."
Brian Miller, who has been selling on Amazon from Shenzhen for seven years, said he sees no point in developing new products under the current conditions. He also expects that he and other sellers will have to raise prices sharply when current inventories run out in one to two months.
A children's construction set that sells on Amazon for $20 and cost his company $3 to produce will now cost $7, including tariffs. To maintain margins, the price will need to be raised by at least 20%, and prices for more expensive toys could rise by 50%, he said.
"I don't see a scenario where, unless the situation changes, serving the US from China will be more viable, and production serving the US will have to be moved to other countries, such as Vietnam or Mexico," Miller said.
According to Wang, given the serious impact of tariffs on small businesses and manufacturers in China, there is a risk of a sharp rise in unemployment in China.
Recall
On April 9, US President Donald Trump announced an increase in tariffs on goods from China to 125% due to "lack of respect".