Chinese businesses that sell on Amazon are preparing to either sharply raise prices for the US market or abandon it entirely, following President Donald Trump’s latest tariff hike on Chinese goods.
In a move described by industry leaders as unprecedented, Trump on Wednesday announced plans to raise tariffs on Chinese imports from the current 104% to 125%, intensifying economic tensions between the world’s two largest economies.
“This isn’t just a tax issue. The entire cost structure gets completely overwhelmed,” said Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, which represents more than 3,000 Chinese Amazon sellers. “It’ll be very hard for anyone to survive in the US market.”
Wang told Reuters the new tariffs could also result in customs delays and increased logistics expenses, further squeezing margins for sellers who are already struggling with rising costs.
“For all of us in the cross-border e-commerce business today, this is truly an unprecedented blow,” she added.
Some sellers are preparing to hike prices for US consumers, while others are exploring alternative markets such as Europe, Canada, and Latin America. Wang’s concerns were echoed by five Shenzhen-based Amazon merchants interviewed by Reuters on Thursday.
China accounts for roughly half of Amazon’s third-party sellers. In Shenzhen alone, more than 100,000 Chinese businesses sell via Amazon, generating an estimated $35.3 billion in annual revenue, according to data from e-commerce service provider SmartScout.
The country also serves as a manufacturing hub for other major platforms like Shein and Temu. Cross-border e-commerce imports and exports in China totaled 2.63 trillion yuan ($358 billion) last year, according to figures from China’s State Council.
However, few global markets can match US consumer demand, making it difficult for Chinese exporters to shift focus without suffering losses. The result, experts warn, could be price wars among sellers in other regions and shrinking profitability.
Three of the five sellers who spoke with Reuters said they plan to raise prices on their US-bound goods, while two said they would exit the market altogether.
Dave Fong, a Shenzhen-based seller whose products range from schoolbags to Bluetooth speakers, said he had already increased US prices by up to 30%. He also plans to reduce inventory and cut back on Amazon ad spending, which used to consume 40% of his US revenue.
“For us and anyone else, you can’t rely on the US market—that’s quite clear,” Fong said. “We have to reduce investment and put more resources into regions like Europe, Canada, Mexico and the rest of the world.”
Brian Miller, another long-time Amazon seller from Shenzhen, echoed Fong’s concerns. He said developing new products for the US market no longer made sense under the current conditions. Once existing inventory runs out, Miller expects significant price increases across many product categories.
He cited an example of children’s building blocks currently sold on Amazon for $20, which cost $3 to produce. With the new tariffs, the production cost would rise to $7. To maintain profitability, the product’s retail price would need to increase by at least 20%, and in the case of more expensive toys, by up to 50%.
“I don’t see a scenario, if things don’t change, where serving the US from China is viable anymore,” Miller said. “Manufacturing that serves the US will have to be transferred to other countries like Vietnam or Mexico.”
Wang warned that the tariffs could have broader economic consequences, especially for small businesses and manufacturers across China.
“If this trend continues, we could see a rapid rise in unemployment here,” she said.
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