On Tuesday, the White House accused Amazon of committing “hostile and political acts” by planning to list additional tariff costs on its website. Amazon has challenged the allegations, saying it does not intend to display additional trade charges.
At President Donald Trump’s first 100-day inauguration press conference, White House press chief Caroline Leavitt assaulted him on Amazon in a news report suggesting he is considering displaying additional costs of his tariff liability on online platforms.
“Why didn’t Amazon do this when the Biden administration hiked inflation to its highest level in 40 years?” asked Leavitt.
She further attacked the company by saying, “Reuters recently wrote that Amazon had partnered with a Chinese propaganda arm,” retaining what appears to be printed news articles.
Amazon denied the White House claim, but its share price temporarily sank following Leavitt’s comments before recovering again soon after.
White House Tillard on retail giants shows the pressure facing Trump’s new tariffs. In China, 145%, and in all other countries, 10% – analysts say the prices will be higher.
Amazon also says it won’t actively expose tariffs as prices are rising, but other major online retailers aren’t that skittish.
what happened?
On Tuesday, Punchbowl News reports that Amazon immediately “will show you how much the cost of the item comes from, what’s next to the total price of the product,” explaining how Trump’s tariffs are affecting the cost of the product.
The Trump administration’s intense response to the Punchbowl article appeared to be based not on the final decision, but on misconceptions of internal plans being considered by Amazon.
Less than an hour after Leavitt’s news briefing, Amazon issued a statement saying that one of its teams was discussing the “idea of listing import fees for a particular product” but that “it will never be considered for the main Amazon site.”
Only Amazon’s transportation services (a low-cost storefront that was recently launched) were “considered” to list import fees for a particular product, he told the Associated Press news agency. But he said this “it won’t happen.”
The AP also reported that Trump called Amazon founder Jeff Bezos to complain about the plans reported Tuesday morning. The administration seemed to change the song after the conversation.
“Jeff Bezos was very kind. He was amazing,” Trump told reporters. “He solved the problem very quickly and he did the right thing. He’s a good guy.”
Is Amazon exposed to Trump’s Chinese tariffs?
Trump’s tariffs, as well as retaliatory responses from target countries, particularly from China, have threatened to raise prices for online retailers. Amazon is inevitable.
Amazon’s US revenue exceeded $600 million last year. Its core business offers is to bill third party sellers to use their websites and leverage those committees to fund its vast shipping infrastructure.
In 2024, 83% of US households went shopping with Amazon. In recent years, major retailers have focused on everyday products such as laundry detergent and toilet paper, from selling big ticket items such as television and gaming consoles.
In turn, revenues increased. In 2023, Amazon processed 5.9 billion delivery orders in the US, up a whopping 15.7% over the course of a year. The US parcel market share has increased by 16.3 percentage points from the 2022 level.
In the US, Amazon earns around 40% of e-commerce. Its business model relies heavily on third-party merchants, many of which are based in China. Low manufacturing and regulatory costs allow us to offer bargain prices.
According to a 2024 survey by Jungle Scout, 71% of the products sold by Amazon in the US are manufactured in China. In the context, it is 2.5 times the number of products supplied from the US.
Third-party sellers are currently facing the choice of raising prices or absorbing the extra costs of Trump’s tariffs. This is an existential threat to many merchants who exist on the thin edge of a razor. E-commerce is a hit.
What do other retailers do?
Many online retailers have denounced Trump’s trade moves. Several well-known companies, including Amazon rivals Temu and Shein, have already raised prices, pointing out the costs of the fees.
Earlier this month, Temu and Shein said separately in the same memo that their operating expenses had risen “due to recent changes in global trade regulations and tariffs.” Both announced that price hikes will take effect on April 25th.
Temu, owned by Chinese e-commerce company PDD Holdings, currently lists “import fees” that have reportedly doubled the prices of many items, but it appears that those available in local warehouses are currently exempt.
Meanwhile, the Singapore-based scene focused on fast fashion has a checkout banner that says, “Taxes are included in the price you pay. You don’t have to pay any additional fees when you deliver.”
Temu and Shein have grown rapidly in recent years, but they were the top two most downloaded apps in the US in 2023, but the share of the US e-commerce market remains much smaller than Amazon’s.
Still, exposure to tariffs on Chinese imports is equally important.
According to a 2023 survey by the U.S. House Selection Committee, nearly half of Temu and Shein’s goods to the US came from China, resulting in roughly 600,000 packages per day.
Like other e-commerce companies, Temu and Shein are about to move several production lines to the US, where they stock more in stock there. However, these measures are not enough to prevent Americans from swallowing higher prices.
What will happen to consumer prices?
Last week, the International Monetary Fund (IMF) said Trump’s unpredictable tariff policies and measures by American trading partners are likely to hit America’s prosperity hard.
At the beginning of the year, the IMF predicted that the US economy would grow to 2.7% in 2025. Following Trump’s “liberation day” tariff announcement, the fund cut its forecast to 1.8%.
The IMF also believes that consumer prices are dark, with US inflation reaching 3% this year compared to forecasts in January. Much of that rise is felt in the form of Chinese imports.
On April 16, US Federal Reserve Chairman Jerome Powell warned that Trump’s tariffs could likely create a “challenging scenario” for central banks and create higher inflation.
Powell added that Trump’s tariffs are likely to cause “at least a temporary increase in inflation.” He also suggested that “the inflation effect could also be more sustained.”
A recent Reuters/Ipsos poll showed that the president’s public approval of economic management fell to 37%, and that survey reduced his lowest score.