Amazon cuts China orders as US tariffs jump to 125%, sellers feel strain

US raises tariffs on Chinese imports to 125 per cent from earlier stated 104 per cent. This came after China retaliated with 84 per cent tariffs on US goods

Amazon has cancelled inventory orders for several products manufactured in China, Vietnam, and Thailand, amid the intensifying US-China trade war, Bloomberg reported. This move comes after US President Donald Trump announced sweeping tariffs on imports from over 180 countries, with duties on Chinese goods soaring to an unprecedented 125 per cent from the earlier stated 104 per cent.

 

Among the affected product categories are beach chairs, scooters, and air conditioners, which were previously sourced from these regions.

 

The tariff escalation has sent shockwaves through global supply chains. China retaliated by increasing its tariffs on US imports to 84 per cent, signalling its intent to "fight to the end."

 

This disruption is not limited to Amazon’s direct inventory -- it also impacts its extensive network of third-party sellers. Nearly half of Amazon's top 10,000 marketplace sellers are based in China. These sellers have historically benefitted from strong supply chain relationships and lower production costs. However, the new tariffs are forcing them to reassess their strategies, the report said.

 

Chinese sellers face tough choice: Price hike or exit

 

Chinese sellers on Amazon are grappling with rising costs due to tariffs, which directly squeeze profit margins. Many are left with two stark options: pass the increased costs onto consumers or exit the US market altogether. Many Amazon sellers have experienced a cost-per-unit increase since the trade war began. This has led to price hikes across various product categories, including toys, clothing, and plastic tableware, news agency Reuters reported.

 

For smaller third-party sellers who lack negotiating power with suppliers, absorbing these costs is often unsustainable.

 

Some Chinese sellers are exploring alternative markets or diversifying their sales channels outside of Amazon’s platform. Others are leveraging their proximity to suppliers and equity partnerships to maintain flexibility amid rising cost.