Amazon CEO Andy Jassy Says Trump Tariff Costs Could Hit Consumers As Sellers Pass Them On, Working To Soften The Blow

Amazon.com, Inc. AMZN CEO Andy Jassy has warned that President Donald Trump's new tariffs on Chinese imports could result in higher prices for consumers, as many of the company's third-party sellers are unlikely to absorb the additional costs.

What Happened: "I understand why, I mean, depending on which country you're in, you don't have 50% extra margin that you can play with," Jassy said in an interview with CNBC's Andrew Ross Sorkin on Thursday. "I think they'll try and pass the cost on."

Jassy acknowledged the challenge, saying Amazon has made "strategic forward inventory buys" and is working to renegotiate purchase order terms to soften the blow.

Despite this, some early consumer behavior indicates that shoppers may be preparing for potential price hikes.

"In certain categories, we do see people buying ahead," Jassy noted. "But it's hard to know if it's just an anomaly in the data because it's just a few days, or how long it's going to last."

Why It Matters: Trump's executive order last week imposed steep tariffs — as high as 125% — on Chinese goods while reducing duties for other countries. A large part of Amazon's business relies on third-party sellers — about 60% of products sold on Amazon come from them.

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Earlier this week, it was reported that Amazon has started canceling certain direct import orders for products sourced from Chinese vendors.

Amazon customers are not the only ones who might be affected. Analysts previously predicted that if Apple Inc. AAPL chooses to pass these additional costs onto customers, iPhone prices could jump by as much as 30% to 40%.

Wendong Zhang of Cornell told The New York Times that tariffs could seriously impact the U.S. economy, noting that China provides most of America's smartphones, laptops, game consoles, and toys.

Prices of low-cost items like fast fashion may also rise, as discount retailers like Shein and Temu heavily depend on Chinese vendors.

Price Action: Amazon's stock is down 17.71% year-to-date. The company's stock dropped 5.17% on Thursday, reaching $181.22, according to data from Benzinga Pro.

Amazon holds an impressive growth score of 94.18%, according to Benzinga Edge Stock Rankings. Click here to see how it compares with other companies.

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