The giant retailer appears to be moving quickly to reduce its tariff exposure
Key Takeaways:
-
Tariff Response: Amazon has reportedly canceled orders for products made in China and other Asian countries following President Trump's tariff announcement, suggesting a move to reduce tariff exposure.
-
Vendor Impact: The sudden cancellations have left some vendors, particularly those with already manufactured goods, facing financial burdens and the need to find alternative buyers.
-
Direct Import Shift: The canceled orders appear to be "direct import orders," where Amazon acts as the importer and typically pays tariffs, potentially shifting the tariff burden back to vendors if they choose to import the goods themselves.
E-commerce giant Amazon.com Inc. has reportedly canceled purchase orders for a variety of products manufactured in China and other Asian nations, according to a Bloomberg report.
This move suggests the company may be proactively seeking to mitigate the impact of anticipated tariffs announced by President Trump earlier this month.
The canceled orders reportedly spanmultiple vendors and include items such as beach chairs, scooters, and air conditioners.
Sources indicate that the abrupt halt to these orders followed President Trump's April 2nd announcement of planned tariffs on goods from over 180 countries and territories, including key manufacturing hubs like China, Vietnam, and Thailand.
Significant risks
The sudden nature of the cancellations has led vendors to believe it is a direct response to the looming tariffs. While an Amazon spokesperson declined to comment on the matter, the company acknowledged the potential risks associated with international trade disputes in its annual report released in February.
The report specifically noted that "China-based suppliers provide significant portions of our components and finished goods."
It remains unclear how widespread these order cancellations are and the total range of products affected.
Amazon's not alone
It's not just Amazon that's threatened by the tariffs.
So-called "fast fashion"websitesShein and Temucould also find themselves facing blowback as the trade war escalates.
Known for a vast selection of ultra-cheap goods and less-than-stellar delivery speeds, the sites have taken a big bite out of the U.S. discount market, $5.3 billion according to a recent Congressional Research Service report -- about 17% of the market.
Trump's 125% tariffs are likely to be quickly reflected in Shein and Temu's sales. More significantly, they're guaranteed to make it harder for consumers to find the super-cheap items they've become accustomed to.
Whether the higher prices and smaller inventories of Chinese goods help domestic U.S. manufacturers remains to be seen.
Posted: 2025-04-10 17:17:52
