Direct imports from China cancelled and more: How Amazon is taking tips from rivals Costco and Walmart to tackle Trump Tariffs

Amazon is reportedly seeking substantial price reductions from its suppliers and imposing stringent terms to protect its profit margins amidst the escalating US tariffs imposed by President Donald Trump. Citing three vendor consultants, who negotiate on behalf of numerous brands and suppliers, The Financial Times reported that the world's largest e-commerce platform is demanding low double-digit percentage price cuts on a wide range of goods, from homeware to consumer electronics and even cancelled direct imports from China .

Reportedly, this push for lower prices is particularly intense for suppliers sourcing products from China, following the White House's implementation of tariffs reaching up to 145%. However, other vendors are also facing increased pressure, the report added.

“Amazon is the 800-pound gorilla in the room. Brands have grown dependent on the platform and have little choice,” said a consultant and former Amazon vendor manager.

Amazon says it is working to maintain low prices for customers
In response to inquiries, Amazon stated, “We’re working with our broad, varied range of valued selling partners in our store to support them in adapting to the developing environment while maintaining low prices for customers."

Logistics providers and analysts have reported that Amazon expedited shipments after Trump's inauguration in anticipation of the increased tariffs. Additionally, Amazon reportedly canceled numerous direct imports from China and shifted its purchasing strategy to favour suppliers with US stock.

Amazon employing strategy it adopted in Trump's first term
The $2 trillion company is said to be employing a strategy reminiscent of Trump's first term, when similar tariffs on Chinese imports were enacted. This approach mirrors actions taken by competitors like Costco and Walmart, who are also pressuring suppliers to mitigate the impact on their profits.

As per Goldman Sachs analysts, the tariffs could potentially reduce Amazon’s operating profits by $5 billion to $10 billion this year, depending on the trajectory of the ‘trade war’. This represents a potential hit of 6-12%.