Amazon’s Merchants Are Feeling the Pain of a Trade War With China
Raising prices to offset the cost of tariffs could hurt sales, and if the standoff worsens, Amazon also could be affected.
Over the past several years, Shanghai entrepreneur Yung Lin has built a decent business selling wrenches, screwdrivers and other tools on Amazon.com. Then President Donald Trump imposed tariffs on thousands of goods made in China, and Lin faced a difficult choice: eat the additional cost or try and pass it onto his mostly American customers. He chose to raise prices and watched sales of some products dive by as much as one third in just two weeks.
Amazon.com Inc. merchants around the world are scrambling to navigate an unpredictable trade war that’s upending their proven business model of buying inexpensive goods in China and selling them at a markup in the U.S. The problem is particularly acute now as Trump weighs another $300 billion worth of tariffs, many on consumer goods.