Amazon Merchants Feel The Pinch Of US China Trade War

Shanghai-based entrepreneur Lin built a business selling products on Amazon. When tariffs came through, he passed costs to customers. Demand fell by 33% in 2 weeks. Amazon merchants are now trying to find new business models Trump is ready to impose fresh tariffs on all goods from China. Ordinary sellers need to place orders now with pricing figured out before Christmas hits. Stockpiling, shifting production and raising prices have consequences. Small businesses are vulnerable since they don’t have the backing and negotiation abilities of companies. Joe Sutherland of UC San Diego’s SCMI stated that small companies are facing issues due to unpredictable administration.

While Amazon is okay at the moment, this could slowly reduce its revenues everything depends on US-China making up. Trump and Jinping will meet at G20 summit for talks about resolving the issue. But even if everything goes alright, things won’t ever be what they once were.

Chuck Gregorich stated that he would consider tariffs permanent hereon. He spent $400K to beat the January 1 tariff cutoff date, but the hikes got delayed there. He is now going to shift to Vietnam or other countries for production. Many others are also considering SE Asia, Central America, and India as production centers.

Michael Micheline makes Italian coffee machines and bar supplies for US shoppers. However, he is now headed to Thailand and opening a new factory. China is now risky, he says. All requisite processes before moving can take a year. Jerry Kavesh, who sells hats and boots, is now relocating to India. However, raw materials still come from China. He is now cutting inventory by 15% and raising prices by 12%. He stated that the administration was being unreasonable.

Chinese sellers are now diversifying to Australian, Japanese and European markets after losing their US customers, as per Eddie Deng of Urbanic. Amazon is yet to comment. It holds membership in IA group, which signed a letter to Trump regarding ending the trade war. Amazon is now agreeing to pay 10% higher for all products which tariffs have affected. The adjustment is still ongoing. But this is only for Amazon supplied goods. Normal sellers are hit the most, trying to understand Trump’s moves. Steve Simonson says that all this could again go away in 2 months, with all these efforts wasted.