Trump prices mean higher prices, large losses for Amazon sellers

President Donald Trump aggressive pricing policy April 2 did not only cause grabuge on the stock market. He sent Amazon Sellers in panic.

Many sellers on Amazon count on China for manufacturing and assembly due to the drop in established costs and infrastructure – up to 70% of goods on Amazon come from China, according to Wedbush Securities. With almost all imports from China Amazing 145% Under the last prices, Amazon sellers must decide to increase prices or absorb the considerably increased cost of importing their goods.

Amazon Andy Jassy CEO Thursday said to CNBC That its vast network of third -party sellers “probably transmitted the cost” to consumers. He added that Amazon made “strategic long -term inventory purchases” and sought to renegotiate conditions on certain purchase orders to maintain low prices.

Although Trump temporarily lowered the prices on most countries to 10% on Wednesday, he doubled the huge prices on goods from China. Before the break, the average rate rates under Trump were at the highest level Since the Great Depression. The “reciprocal prices” were much more steep in regions like Southeast Asia. The prices have also struck American allies at unusual rates, including 20% ​​on the European Union and previously announced 25% of prices on Mexico and Canada.

Josianne Boisvert from the Canadian base Winch Co Portable. said she “was in shock” when the prices were announced. For 20 years, the company has led its products to an hour at the American border to send the franchise of rights to American customers.

“We are wondering if we simply move our goal in Europe,” said Boisvert.

CNBC spoke to several Amazon sellers to discover how new prices have an impact on their prices decisions and where to manufacture.

In a small warehouse in San Rafael, California, Dusty Kenney showed hundreds of CNBC boxes filled with her Primastella Brand baby spoons, bento boxes and other children's products. Most of them arrived at the China Sea before the prices come into force. Paying the additional prices could put it to bankruptcy if they continue, she said.

“I will hold my prices as long as possible and simply absorb these prices because I am already in competition with Chinese sellers who undercoign me,” said Kenney. Although prices also have an impact on its Chinese competitors, the cost of doing business in the United States is much higher than in China.

“The administration would like people to think that this is a Chinese problem, and that it is only injuring Chinese companies and helping American companies. But I am a business based in the United States,” let's be clear, “said Kenney. “Everything is undertaken here, designed here, photographed here. All the income that comes from who stay here.”

Several sellers said they were planning to increase prices if Trump's prices remain.

The vast majority of products on Amazon are sold by third parties, but prices will also have an impact on the primary brands of the company.

This includes Amazon brand batteries, which compete with Duracell and Energizing Sending at lower prices, Jason Goldberg said Publicis group.

If Amazon has to increase the price of its own batteries, he said that “consumers probably have a preference for this well -known and familiar brand”.

The technological company based in Seattle is likely to wait at least six months before transmitting tariff costs to consumers, Dan Ives of Sewbush Securities said.

“The last thing they want to do is to transmit it immediately to the consumer, because you do not know how transient it is,” said Ives, adding that Amazon probably “well advanced” by diversifying his supply chain outside China.

It is a strategy that many Amazon sellers are also trying.

Amazon did not immediately respond to a request for comments.

Certain categories, such as toys, have a long history of manufacturing in China and have so far been exempt from prices. Jay Foreman began his career in a toy factory in Brooklyn, New York, about 40 years ago.

Manufacturing has migrated to China over 30 years ago due to “not only a huge workforce, but they invested in the infrastructure to create a toy manufacturing supply chain,” said Foreman, CEO Basic pleasureWho makes popular toys like tonka trucks, care bears, Lincoln logs, tinker toys and bite lite.

“Whether you were doing a tonka truck in China or a Apple iPhone, they understood it. They make quality products there and it is difficult to reproduce elsewhere, “said Foreman.

A large part of the manufacturing of toys has moved to Vietnam, Mexico and India in the past five years due to the prices of China during Trump's first term, Foreman said. But many toy factories are also belonging to Chinese companies, he said.

“So you are not escaping from doing business with the Chinese,” said Foreman.

Other product categories, such as teas, cannot easily be cultivated in the United States due to the climate.

“You need high humidity. Usually you have to be at a very high altitude. And these things only meet in certain parts of the world,” said James Fayal, who manages a high -energy tea brand Zest. With his green tea cultivated in coastal China and black tea in India, Fayal said he will have to transmit the cost to consumers because he has no American option.

For brands that make in the United States, prices create a competitive advantage, these companies said.

“Put our products side by side to a competitor who obtains it abroad and it is a difference in night and day,” said Dayne Rusch de Vyper Industrial.

The American manufacturing stools of Vyper and other workshop equipment go price from $ 350 to $ 650 while foreign manufacturing alternatives can sell less than $ 40, said Rusch.

At the National Hardware Show in March, Rusch said he had been approached by many suppliers asking if Vyper would plan to make their products.

“There is a huge opportunity for OEM manufacturers to start taking more work from these people who bought abroad and starting to get there in the United States,” said Rusch.

The other sold who spoke to CNBC said that it was not financially doable to move manufacturing in the United States, even if this would avoid prices.

Some, like William SU, completely move the manufacture of China, but remain abroad. Su has created a factory for its Team Brand in Vietnam in reaction to the prices of China during Trump's first term. He is now in manufacturing talks in India. Trump struck the two countries with important prices last week, although they are temporarily pending.

Surrounded by her colored baby products in California, Kenney told CNBC that she was planning to open her own manufacturing site.

“But it is well above my head and my budget,” she said. “I would like to be able to manufacture in the United States, but the truth is that the infrastructure is not there.”

With fewer factories in the United States than in China, Kenney said that the cost to manufacture its products at the national level would be double or triple what it pays now.

“The inhabitants of China are hungry for work,” she said. “They will come back to you right away. They make sure you get your shipments immediately. They are on it.”

There is a tariff announcement that Trump made which is a boon for American sellers like Kenney: to close the fault known as “minimis”.

This exemption allowed ordinances of less than $ 800 to avoid paying taxes and taxes, and this is what made the prices absurdly possible on direct Chinese sites like Temu, Alibaba and Shein. Customs and the protection of American borders said He processed more than 1.3 billion minimis deliveries in 2024, compared to more than a billion shipping in 2023.

Chinese sellers send small orders directly to American customers to keep shipments as part of the $ 800 limit. American sellers like Kenney are not often eligible for Minmis because they ship in large quantities by the palette, bringing products to their warehouses for quality checks instead of sending Chinese factories directly to customers.

Kenney sold his most popular product, a set of six silicone baby spoons, for $ 9.99 on Amazon. It reduced the price to $ 7.99 to compete with imitations that are sold for $ 3 on TEMU.

“I even had them ripped off all my photos and content that I created and use it to sell their launch products,” said Kenney.

Asset briefly put minimis pending in February. A few days later, he temporarily restored the escape because the enormous number of Chinese packages began to accumulate in post offices and American customs offices to perceive such rapid pace.

The president on April 2 announced again that he was minimizeEfficient on May 2.

The White House said “adequate systems“are now in place to collect prices. He has added that the flaw is closed to target Chinese” deceived “sender who” hide illicit substances, including synthetic opioids, in low value packages to exploit the exemption from minimis. “”

Foreman of Basic Fun said that his Tonka truck crosses many layers of inspection before landing on Amazon.

“Everything that happens on minimis does not go through this security exam,” said Foreman. “The small packages that could have included a dress or a kind of tchotchke could have been filled with illegal drugs or things like that, could be counterfeit, could be bootlegs or imitations.”

Some Amazon sellers benefited from DE MINMIS, in particular on its separate site of direct Amazon Haul China, that launched in November To compete with TEMU. But killing Minmimis will be a net positive for Amazon because it will harm competitors like Temu, Ives said at Wedbush Securities.

De Minmimis has been a “escape that has been shooting Amazon for the past 18 months,” said Ives.

What remains to be seen is how Trump's prices will change in the coming weeks and what prices of other countries will impose on American products. These present a risk for Amazon and its American merchants who sell to foreign customers.

“He just has a cascade impact throughout the economy,” said Goldberg de Publicis Group. “Uncertainty is really bad for business, it doesn't matter who wins or loses a specific price.”