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Amazon CEO warns of price hikes due to tariffs

Amazon CEO warns of price hikes due to tariffs
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Amazon CEO warns of price hikes due to tariffs
Amazon shoppers can likely expect some prices to rise due to the ongoing global trade war, the company鈥檚 CEO admitted.The online retailer鈥檚 network of third-party sellers 鈥渨ill pass that cost on,鈥� Andy Jassy said Thursday on CNBC, in response to the impact of tariffs affecting product prices. 鈥淒epending what country you鈥檙e in, you don鈥檛 have 50% extra margin that you can play with.鈥漁n Wednesday, President Donald Trump temporarily paused his reciprocal tariffs for 90 days. Those tariffs placed hefty levies between 11% and 50% on dozens of countries.But Trump isn鈥檛 backing down from his trade war with China, where many Amazon products come from, and raised his tariffs on Chinese imports to 125%. Then, on Thursday, Beijing鈥檚 retaliatory 84% tariffs on U.S. imports to China went into effect.However, Jassy said that Amazon is 鈥渄oing everything we can to try and keep prices the way they鈥檝e been for customers 鈥� as low as possible.鈥� He said the company has done some 鈥渟trategic forward inventory buys鈥� and has renegotiated terms with sellers so customers 鈥渉ave lower prices.鈥漇o far, Jassy said the company hasn鈥檛 seen changes in customer behavior in a 鈥渕eaningful way,鈥� only revealing Amazon has noticed some 鈥減eople buying ahead鈥� as well as maintaining their purchasing habits recently triggered by inflation.鈥淐ustomers have gotten more careful and whenever they can trade down on price, they do. Whenever they can find a bargain, they do,鈥� he said.It鈥檚 a stark contrast with its largest rival, Walmart, which pulled its financial guidance on Wednesday for the quarter because of uncertainty over the impact of tariffs. Still, the retailer maintained that sales during the quarter will grow by up to 4% and reaffirmed its full-year sales and profit guidance.Amazon shares fell 3% at the opening, mirroring a larger sell-off in the markets.

Amazon shoppers can likely expect some prices to rise due to the ongoing global trade war, the company鈥檚 CEO admitted.

The online retailer鈥檚 network of third-party sellers 鈥渨ill pass that cost on,鈥� Andy Jassy said Thursday on CNBC, in response to the impact of tariffs affecting product prices. 鈥淒epending what country you鈥檙e in, you don鈥檛 have 50% extra margin that you can play with.鈥�

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On Wednesday, President Donald Trump temporarily paused his reciprocal tariffs for 90 days. Those tariffs placed hefty levies between 11% and 50% on dozens of countries.

But Trump isn鈥檛 backing down from his trade war with China, where many Amazon products come from, and raised his tariffs on Chinese imports to 125%. Then, on Thursday, Beijing鈥檚 retaliatory 84% tariffs on U.S. imports to China went into effect.

However, Jassy said that Amazon is 鈥渄oing everything we can to try and keep prices the way they鈥檝e been for customers 鈥� as low as possible.鈥� He said the company has done some 鈥渟trategic forward inventory buys鈥� and has renegotiated terms with sellers so customers 鈥渉ave lower prices.鈥�

So far, Jassy said the company hasn鈥檛 seen changes in customer behavior in a 鈥渕eaningful way,鈥� only revealing Amazon has noticed some 鈥減eople buying ahead鈥� as well as maintaining their purchasing habits recently triggered by inflation.

鈥淐ustomers have gotten more careful and whenever they can trade down on price, they do. Whenever they can find a bargain, they do,鈥� he said.

It鈥檚 a stark contrast with its largest rival, Walmart, which pulled its financial guidance on Wednesday for the quarter because of uncertainty over the impact of tariffs. Still, the retailer maintained that sales during the quarter will grow by up to 4% and reaffirmed its full-year sales and profit guidance.

Amazon shares fell 3% at the opening, mirroring a larger sell-off in the markets.