Amazon's CEO Andy Jassy indicated that consumers may ultimately bear the burden of increased tariffs through higher prices, as third-party sellers adapt to new trade policies.
Speaking in a CNBC interview, Jassy acknowledged that sellers on Amazon's marketplace operate on tight margins and will likely transfer additional costs to customers. This could substantially impact consumers, given that third-party vendors represent approximately 60% of all products sold on Amazon's platform.
The company has already observed early signs of consumers stockpiling certain items in anticipation of price increases, though Jassy noted it's premature to determine if this is a lasting trend.
In response to recent tariff changes, Amazon has implemented several strategies to manage costs, including strategic inventory purchases and renegotiating terms with suppliers. The company has also begun canceling some direct import orders from Chinese vendors.
The situation follows President Trump's recent executive order on tariffs, which was subsequently modified to apply a 10% universal rate to all trading partners except China.
Regarding Amazon Web Services (AWS), the company's cloud computing division, Jassy emphasized their proactive approach to supply chain diversification. Despite potential cost pressures from tariffs on AI infrastructure components, he confirmed AWS will maintain its ambitious expansion plans, including a projected $100 billion investment in AI technologies this year.
"We're going to keep building," Jassy stated, highlighting the company's commitment to growth despite trade policy challenges.
The full impact of these tariff changes remains uncertain, as both Amazon and its vast network of sellers continue to evaluate and adjust to the new trade landscape.