Key Points
- Amazon CEO Andy Jassy said that President Trump’s tariffs are starting to raise the prices of some items.
- This is a shift from last year when Jassy said he hadn’t seen any significant price increases.
- Amazon and its sellers had pre-purchased inventory to delay the impact, but that supply has now run out.
- Some sellers are passing the higher costs on to consumers, while others are absorbing them.
Amazon CEO Andy Jassy said on Tuesday that President Trump’s sweeping tariffs are finally starting to show up in the prices of some items on the e-commerce giant’s website. Jassy’s comments are a significant shift from last year, when he said he hadn’t seen any major price increases.
Speaking at the World Economic Forum in Davos, Jassy explained that Amazon and many of its sellers had pre-purchased significant inventory to get ahead of the tariffs and keep prices low. But that supply has now run out, and sellers are being forced to make some tough decisions.
“You start to see some of the tariffs creep into some of the prices,” Jassy said. “Some sellers are deciding that they’re passing on those higher costs to consumers in the form of higher prices, some are deciding that they’ll absorb it to drive demand, and some are doing something in between.”
Jassy said that Amazon is trying to “keep prices as low as possible,” but with a retail business that operates on very thin margins, there’s only so much they can do. “If people’s costs go up by 10%, there aren’t a lot of places to absorb it,” he said.
Despite the price hikes, Jassy said that consumers are still “pretty resilient” and are continuing to spend. However, he has noticed a change in their behavior. Some people are trading down to cheaper items and hunting for bargains, while others are putting off purchases of big-ticket, non-essential products.
Jassy’s comments confirm what many economists and retail groups have been warning about for months: the trade war is starting to hit American consumers’ wallets.
