Amazon’s CEO, Andy Jassy, recently shared some thoughts on how tariffs are starting to affect consumer prices. In a CNBC interview, he explained that the inventory Amazon had stocked up on to keep prices low is now mostly depleted. As a result, shoppers may begin to see the effects of these tariffs on product prices.
This news aligns with findings from the Kiel Institute for the World Economy, which revealed that a staggering 96% of tariff costs are passed onto American consumers, while foreign exporters only absorb 4%. Jassy mentioned that some sellers are opting to raise their prices to cover these costs, while others may choose to absorb them temporarily to maintain sales.
In addition to tariffs, there are new regulations affecting low-cost imports. Last August, an executive order closed the “de minimis” loophole, which previously allowed small-value goods to enter the U.S. without duties. Jassy pointed out that this change leaves limited options for Amazon and third-party sellers to avoid raising prices further.
“If costs go up by 10%, there aren’t many ways to absorb that,” he said. While Amazon is committed to working with their partners to keep prices as low as possible, he acknowledged that choices are running out.
Recent trends show that consumers are starting to react to these shifts. Many are discussing the impact of rising prices on social media, expressing concerns about affordability in various markets. Historically, this situation echoes past trade tensions, where consumers often felt the pinch long before the broader economic consequences became clear.
As purchasing power tightens for many, understanding the interplay between tariffs and retail prices becomes crucial. If you’re interested in diving deeper into the economic implications of current trade policies, the Kiel Institute’s report is a valuable resource.
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