U.S. tariff hikes are an unprecedented blow to the e-commerce industry. Meanwhile, China is home to around half of all Amazon sellers, as well as manufacturers such as Shein and Temu.
Chinese companies that sell products on Amazon are preparing to hike prices for the U.S. or quit that market due to President Donald Trump's unprecedented tariff hikes, sellers and the head of China's largest e-commerce association said.
Trump said on Wednesday he would raise tariffs on Chinese imports to 125% from the 104% level already in effect, escalating the high-stakes confrontation between the two world's largest economies.
Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, which represents over 3,000 Amazon sellers, said the issue goes beyond taxes, as the entire cost structure is at risk of collapsing. She warned it would be extremely difficult for sellers to stay competitive in the U.S. market, with tariffs potentially causing customs delays and increased logistics costs. According to Wang, this represents an unprecedented challenge for the cross-border e-commerce industry, and while some sellers plan to raise prices in the U.S., others are exploring alternative markets.
China is home to around half of Amazon's sellers, with over 100,000 Amazon businesses registered in the southern city of Shenzhen alone, generating annual revenues of $35.3 billion, according to e-commerce services provider SmartScout.
China also hosts the manufacturing bases of other major e-commerce platforms like Shein and Temu. Imports and exports involving cross-border e-commerce were worth 2.63 trillion yuan ($358 billion) last year, according to China's State Council.
No other country comes even close to U.S. consumption power, significantly limiting the production the rest of the world can absorb and raising the risk of intensifying price wars among Chinese exporters squeezing profitability.
Of the five sellers who spoke to Reuters, three said they would look to raise prices for their exports to the U.S., while two planned to leave the market entirely.
Source: Reuters
