Chinese sellers on Amazon are weighing significant price increases or an exit from the United States market, following President Donald Trump’s announcement of a sharp rise in tariffs on Chinese goods.
In a move that escalates trade tensions between the world’s two largest economies, Trump stated on Wednesday that tariffs on Chinese imports would be raised to 125 per cent, up from the current 104 per cent. The policy has sent shockwaves through China’s e-commerce sector.
“This goes far beyond just an increase in taxes – it completely disrupts our cost structure,” said Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, which represents over 3,000 Amazon sellers. “Operating in the US market under these conditions will be extremely difficult.”
Wang told Reuters the tariff hike could also cause customs delays and drive up logistics expenses, compounding the challenges already faced by Chinese exporters. “For those of us in cross-border e-commerce, this is an unprecedented blow,” she added.
As sellers scramble to adapt, some are preparing to raise prices for US consumers, while others are exploring alternative markets. Wang’s comments were echoed by five Shenzhen-based Amazon sellers, all of whom expressed concern about future viability in the US market.
China is a major player in Amazon’s global marketplace, with more than half of Amazon sellers believed to be based in the country. In Shenzhen alone, over 100,000 Amazon businesses operate, collectively generating around $35.3 billion in annual sales, according to data from e-commerce service provider SmartScout.
The country is also a manufacturing hub for fast-growing platforms such as Shein and Temu. Official figures from China’s State Council indicate that cross-border e-commerce trade—both imports and exports—totalled 2.63 trillion yuan ($358 billion) in 2023.
Despite their global reach, Chinese sellers remain heavily dependent on the US due to its unmatched consumption power. With few other markets able to absorb similar levels of output, analysts warn the shift could trigger price wars among Chinese exporters, squeezing already-thin profit margins.
Of the five sellers interviewed, three said they planned to raise their US prices, while the remaining two intended to exit the market altogether.
Dave Fong, whose product range includes schoolbags and Bluetooth speakers, said he had already increased prices in the US by up to 30 per cent. He also intends to scale back advertising spend on Amazon—which previously consumed 40 per cent of his US revenue—and reduce inventory levels.
“It’s clear now that we can’t rely on the US market,” Fong said. “We’ll have to shift our focus and redirect investments towards Europe, Canada, Mexico, and other regions.”
Brian Miller, a veteran Amazon seller based in Shenzhen, said he has halted plans to develop new products. Once existing stock runs out—likely within one to two months—he expects substantial price increases.
A toy that once cost his company $3 to manufacture now comes to $7 when factoring in the new tariffs. To maintain margins, the selling price on Amazon would need to rise from $20 to at least $24. For more expensive products, prices could surge by 50 per cent.
“If nothing changes, continuing to serve the US market from China will no longer be feasible,” Miller warned. “Manufacturing for the US will have to shift to countries like Vietnam or Mexico.”
Wang also raised concern about the broader economic fallout. With small businesses and manufacturers hit hard, she warned that the new tariffs could accelerate unemployment in China’s already-strained economy.
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