Chinese Amazon Sellers to Raise Prices or Exit U.S. Amid Soaring Tariffs

Chinese sellers on Amazon are preparing to raise prices or withdraw from the U.S. market following a sharp increase in tariffs announced by President Donald Trump.

Credit: AMAZON

Trump said on Wednesday that tariffs on Chinese imports would rise to 125%, up from the current 104%, intensifying trade tensions between the world’s two largest economies.

Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, said the tariff hike would overwhelm cost structures and make it difficult for sellers to survive in the U.S. market.

Wang represents more than 3,000 Amazon sellers and said the new tariffs could also cause customs delays and higher logistics costs.

“This is truly an unprecedented blow,” she said.

Some sellers are planning to increase prices in the U.S., while others are seeking new markets, according to Wang and five Shenzhen-based Amazon sellers interviewed on Thursday.

China accounts for about half of Amazon’s sellers, with over 100,000 Amazon businesses registered in Shenzhen alone, generating annual revenues of USD 35.3 billion, according to e-commerce services provider SmartScout.

Imports and exports involving cross-border e-commerce in China were worth CNY 2.63 trillion (USD 358 billion) last year, according to China’s State Council.

However, no other country matches the U.S. in consumption power, limiting the ability of Chinese exporters to shift production and increasing the risk of price wars that could squeeze profits.

Of the five sellers interviewed, three said they would raise prices for U.S. exports, while two planned to exit the market entirely.

Dave Fong, who sells products ranging from schoolbags to Bluetooth speakers, said he has already raised U.S. prices by up to 30%.

Fong plans to reduce inventory and cut spending on Amazon advertising, which previously consumed 40% of his U.S. revenue.

“You can’t rely on the U.S. market,” Fong said. “We have to reduce investment and put more resources into regions like Europe, Canada, Mexico and the rest of the world.”

Brian Miller, a Shenzhen-based Amazon seller for seven years, said he would not develop new products under current conditions and expects to raise prices significantly once existing inventory runs out.

He said building blocks for children that currently sell for USD 20 and cost USD 3 to produce would now cost USD 7 with the new tariff.

Maintaining margins would require a price increase of at least 20%, with higher-cost toys potentially rising by 50%.

“if things don't change, that serving the U.S. from China is viable any more” Miller said, adding that manufacturing may need to shift to countries like Vietnam or Mexico.

Wang warned that the tariffs could severely impact China’s small enterprises and manufacturers, potentially accelerating the country’s unemployment rate.

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• Chinese Amazon sellers face 125% U.S. tariffs, up from 104%

• Many plan to raise prices or exit the U.S. market entirely

• Shenzhen alone has over 100,000 Amazon businesses

Source: REUTERS