New York
CNN
—
Amazon shoppers can likely expect some prices to rise due to the ongoing global trade war, the company’s CEO admitted.
The online retailer’s network of third-party sellers “will pass that cost on,” Andy Jassy said Thursday on CNBC, in response to the impact of tariffs affecting product prices. “Depending what country you’re in, you don’t have 50% extra margin that you can play with.”
On Wednesday, President Donald Trump temporarily paused his so-called reciprocal tariffs, which aren’t really reciprocal, for 90 days. Those tariffs placed hefty levies between 11% and 50% on dozens of countries.
But Trump isn’t backing down from his alarming trade war with China, where many Amazon products come from, and raised his tariffs on Chinese imports to 125%. Then, on Thursday, Beijing’s retaliatory 84% tariffs on US imports to China went into effect.
However, Jassy said that Amazon is “doing everything we can to try and keep prices the way they’ve been for customers — as low as possible.” He said the company has done some “strategic forward inventory buys” and has renegotiated terms with sellers so customers “have lower prices.”
So far, Jassy said the company hasn’t seen changes in customer behavior in a “meaningful way,” only revealing Amazon has noticed some “people buying ahead” as well as maintaining their purchasing habits recently triggered by inflation.
“Customers have gotten more careful and whenever they can trade down on price, they do. Whenever they can find a bargain, they do,” he said.
It’s a stark contrast with its largest rival, Walmart, which pulled its financial guidance on Wednesday for the quarter because of uncertainty over the impact of tariffs. Still, the retailer maintained that sales during the quarter will grow by up to 4% and reaffirmed its full-year sales and profit guidance.
Amazon (AMZN) shares fell 3% at the opening, mirroring a larger sell-off in the markets.
