As President Trump imposes high tariffs on China, Chinese Amazon sellers are choosing different ways to respond.
On April 10, Trump posted on Truth Social, stating that China “lacks respect for the world market” and that tariffs on Chinese goods will be raised to 125%, effective immediately. Meanwhile, reciprocal tariffs on other countries have been delayed by 90 days. Learn more
In response, major U.S. retailers like Walmart, Costco, Home Depot, and Target have shifted the burden of additional tariff costs onto Chinese suppliers, demanding price reductions to offset the tariffs. However, these moves have faced opposition from China’s Ministry of Commerce. Learn more
The Impact on Amazon’s Seller Base
Amazon has yet to issue an official statement regarding the tariff hike, but its platform relies heavily on Chinese sellers. According to e-commerce service provider SmartScout, nearly half of Amazon’s sellers are based in China. Marketplace Pulse reports that in 2024, Chinese sellers accounted for close to 50% of the top 10,000 sellers on Amazon’s U.S. marketplace.
The tariff increase specifically targets countries that are key suppliers for cross-border e-commerce platforms, including Temu, AliExpress, and SHEIN, whose manufacturing hubs are predominantly in China and Vietnam. This policy shift is expected to result in:
- Rising costs and squeezed profit margins
- Pricing adjustments that may impact sales
- Loss of price competitiveness in certain product categories
Many sellers have expressed frustration, noting that while tariffs of 20–30% could be absorbed through reduced profits or slight price increases, the unprecedented 125% tariff makes business operations nearly impossible.
“The tariffs have increased so much, I basically do not care about how to carry out business after that, because there is no use to be anxious. the industry will inevitably face turbulence for a while.” said jacy, who has been engaged in cross-border e-commerce business for almost 10 years, although his company’s main business is in the United States, it is not limited to the United States.
“Amazon sellers with low price strategies will be hit harder.” Cathy said, “The increase in tariffs has made their profits thinner, while the elimination of the minimum exemption policy may put some sellers out of business, and the strong sellers have enough money to support this trade instability phase.”
At the same time, there are many Chinese sellers suffer. In order to avoid the cost of 125% superimposed tariffs, the airfreight market on the China-US route has gone completely “crazy”.
Due to the tariff problem caused by the limited capacity of shipping, many sellers are using air transportation as an emergency channel, stock up some high tariff goods in advance, trying to avoid the excessive increase in subsequent costs.
For instance, the Shenzhen, China-to-U.S. air freight rate has surged from $3.99/kg in early April to $5.50–$6.20/kg, with expedited orders exceeding $7/kg.
How Tariffs Are Reshaping E-Commerce
1. Elimination of Low-Cost Sellers
Many sellers who rely on low-cost strategies may be forced out of the market. This shift could leave room for stronger, branded sellers, which may ultimately benefit the industry’s long-term health.
2. Supply Chain Relocation
To avoid high tariffs, some sellers are considering relocating production or warehousing to Southeast Asia or other low-tariff countries. This trend could lead to a global redistribution of supply chains.
3. Rise of Localized Warehousing
More sellers may opt to establish warehouses within the U.S. to reduce logistics costs and minimize tariff risks. This presents significant opportunities for third-party logistics providers.
As the Chinese saying goes, “After rain, there’s a rainbow.” Challenges often bring opportunities. Sellers who adjust their strategies and explore new growth channels will be better positioned to thrive in the evolving international market.
11 Apr, 2025
