Trump-Amazon Spit: What Happened and How Much American Consumers Import Online | Trade War News

The White House accused Amazon of planning to list additional tariffs on its website, thus enforcing “hostile and political acts.” Amazon disputed the allegation, saying it did not intend to show any additional trade charges.

In a press conference marking 100 days before Donald Trump’s tenure, White House press secretary Karoline Leavitt slammed Amazon in a news report, suggesting the company is considering showing additional tariffs on its online platform.

“When the Biden administration has raised inflation to its highest level in 40 years, why didn't Amazon do that?” Levite asked.

She further attacked the company, saying: “Reuters recently wrote that Amazon worked with China's propaganda department” and held print volumes that appear to be news articles.

Although Amazon denied the White House allegations, its stock price sank briefly after Leavitt's comments before recovering again soon after.

The White House’s long war against retail giants shows that it faces pressure on Trump’s new tariffs — 145% in China and 10% in all other countries — which analysts say will lead to higher prices.

While Amazon said it won't proactively reveal tariffs due to rising prices, other major online retailers aren't that great.

what happened?

On Tuesday, Punchbowl News reported that Amazon will soon “display the cost of an item is derived from the tariffs – just next to the prices listed in the product, to illustrate how Trump’s tariffs affect the cost of goods.

The Trump administration's fierce reaction to Punchbowl article appears to be based on a misunderstanding of the internal plans Amazon considers, rather than any final decision.

Leaving less than an hour after Leavitt's press conference, Amazon issued a statement saying that although one of the teams had discussed “the idea of ​​listing import fees on certain products,” it had “never considered a major Amazon site.”

A company spokesperson told AP News that only Amazon’s shipping service, its recently launched low-cost storefront, “consider the import costs of certain products.” But he said that this “will not happen.”

The Associated Press also reported that Trump called Amazon founder Jeff Bezos to complain about plans for the Tuesday morning report. After the conversation, the government seemed to have changed its tune.

“Jeff Bezos is very good. He is great.” Trump told reporters before leaving the White House for Michigan on Tuesday afternoon. “He quickly solved a problem and he did the right thing. He was a good guy.”

Is Amazon exposed to Trump's Chinese tariffs?

Trump’s tariffs — and retaliatory responses from targeted countries, especially China — threaten to raise prices for online retailers and expand to U.S. consumers. Amazon will not be spared.

Last year, Amazon's U.S. revenue exceeded $60 billion. Its core business product is to charge third-party sellers its website and then use these commissions to fund its vast delivery infrastructure.

In 2024, 83% of households in the United States shop with Amazon. In recent years, the retail giant has adjusted its focus from selling large items such as TVs and game consoles, such as everyday items such as laundry detergent and toilet paper.

In turn, income increased. In 2023, Amazon processed 5.9 billion delivery orders in the United States, an increase of 15.7 percentage points in the year. Its share in the U.S. parcel market has also increased by 16.3 percentage points from the 2022 level.

In the United States, Amazon is about 40% of e-commerce sales. Its business model relies heavily on third-party merchants, many of whom are located in China – they can offer cheap prices due to the low manufacturing and regulatory costs.

According to a 2024 survey by Jungle Scout, 71% of Amazon’s merchandise sold in the U.S. are made in China. For context, this is 2.5 times the number of products from the United States.

Now, third-party sellers are facing the option of raising prices or absorbing the extra fees of Trump’s tariffs. For many businessmen, this is an existing threat, they rely on razor-thin edges. E-commerce will take a hit.

What are other retailers doing?

Many online retailers have condemned Trump's trade move. Several big-name companies, including Amazon's rivals Temu and Shein, have raised prices while pointing out the costs of tariffs.

Earlier this month, Temu and Shein said in separate but nearly identical notes that their operating expenses “have risen due to the latest changes in global trade rules and tariffs.” Both of them announced that the price increase will take effect on April 25.

Temu, owned by Chinese e-commerce company PDD Holdings, now lists “import fees” that have been reportedly doubled, although the prices available in local warehouses appear to be exempt.

Meanwhile, Shein, focusing on fast fashion and based in Singapore, now has a checkout banner that reads now: “The price you pay includes tariffs. You never have to pay extra fees when delivering.”

Although Temu and Shein have experienced rapid growth in recent years, they are the two most downloaded apps in the U.S. in 2023, and their share in the U.S. e-commerce market is still much smaller than Amazon’s.

Nevertheless, their tariffs on Chinese imports remain equally important.

According to a 2023 survey by the U.S. House Selected Committee, nearly half of the shipments sent by Temu and Shein come from China, with about 600,000 bags per day.

Like other e-commerce companies, Temu and Shein are trying to move some production lines to the U.S. and store more stock there. However, these measures are not enough to prevent Americans from swallowing higher prices.

What happens to consumer prices?

Last week, the International Monetary Fund (IMF) said Trump's unpredictable tariff policies and countermeasures from U.S. trading partners could deal a heavy blow to the U.S. prosperity.

At the beginning of this year, the International Monetary Fund predicted the U.S. economy to grow by 2.7% in 2025. The fund lowered its forecast to 1.8% after announcing Trump's “liberation day” tariffs.

The IMF's consumer price is also becoming increasingly frustrating, with U.S. inflation now hitting 3% this year, compared with its January forecast of 2%. Much of this rise will be felt in the form of Chinese imports.

On April 16, U.S. Federal Reserve Chairman Jerome Powell warned that Trump's tariffs are posing a “challenging situation” for central banks and could generate higher inflation.

Powell added that Trump's tariffs could “increase inflation at least temporarily.” He also suggested that “the inflation effect may also last more.”

A Reuters/IPSOS poll showed public recognition of the president's economic management fell to 37%, his lowest score ever in the survey.