Amazon Tariffs Impact: Prices Rise, Jassy Says
Amazon tariffs impact is pushing up platform prices, CEO Andy Jassy said, prompting seller price increases and squeezing retail margins and demand.
KEY TAKEAWAYS
- Jassy said tariffs had pushed up platform prices as pre-tariff inventory ran out.
- Sellers responded by passing, absorbing, or using hybrid pricing strategies to handle tariff costs.
- Supreme Court review and Treasury's $1 trillion refund risk raise policy uncertainty for AMZN.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Amazon.com Inc. said Jan. 20–21, 2026 that President Trump's tariffs are beginning to push up prices on its platform as third-party sellers’ pre-tariff inventory runs out, marking an Amazon tariffs impact that has led some sellers to pass costs to shoppers.
Tariffs Are Driving Price Increases and Shifting Consumer Behavior
Amazon CEO Andy Jassy said at the World Economic Forum in Davos that tariffs are starting to raise prices on the platform, reversing his June–July 2025 statements that prices had not "appreciably" risen. Amazon and many third-party sellers had forward-staged inventory in early 2025 to hedge against tariff uncertainty. That pre-tariff stock ran out in fall 2025, exposing sellers to the new levies.
Sellers are responding in three ways: some are raising prices to pass on tariff costs, others are absorbing the added expenses to maintain demand, and some are using hybrid strategies. Jassy noted that retail operates on mid-single-digit operating margins, so a 10% cost increase leaves limited room to offset expenses.
Consumers remain resilient but are shifting behavior by favoring cheaper items, bargain hunting, and postponing premium discretionary purchases. Amazon aims to keep prices as low as possible but faces structural limits. The company offered no price guidance or timetable, implying ongoing price pressure through at least early 2026 as remaining pre-tariff stock depletes.
Legal and Policy Risks Surrounding Tariffs
The tariff regime imposes a 10% baseline levy on nearly all imports and rates up to 145% on certain Chinese goods, enacted under presidential emergency powers. The U.S. Supreme Court is reviewing the constitutionality of this authority after lawsuits by small businesses. Treasury Secretary Scott Bessent told a court that a ruling against the tariffs could trigger refund liabilities as large as $1 trillion.
Research from the Kiel Institute for the World Economy estimates about 96% of tariff revenue is borne by U.S. consumers and roughly 4% by foreign exporters.
In April 2025, Amazon considered displaying tariff costs next to product prices but withdrew the proposal after public objections, including a call from President Trump to Amazon’s founder. Amazon said the plan was never authorized and would not be implemented. No SEC filings, regulatory approvals, or government actions targeting Amazon specifically were identified for the Jan. 20–21, 2026 period.
Combined with the ongoing legal review, Jassy’s comments increase near-term uncertainty over platform pricing and seller margins for Amazon and highlight a policy risk that could materially affect corporate liabilities if the Supreme Court rules against the tariff authority.
