Chinese Amazon sellers are gearing up for a massive shakeup as President Donald Trump's decision to raise taxes on Chinese imports to 125% drives many to either raise prices or exit the U.S. market entirely.
The move, from an already steep 104%, indicates a significant escalation in trade tensions between the world's two biggest economies.
Wang Xin, the head of the Shenzhen Cross-Border E-Commerce Association, which represents over 3000 Amazon vendors, called the increased tariffs an "unprecedented blow." She noted that the cost burden isn't limited to taxes; increased customs delays and logistics costs are compounding the pressure. "It'll be very hard for anyone to survive in the U.S. market," she warned.
China accounts for over half of Amazon's vendors, with over 100,000 registered businesses in Shenzhen alone earning more than $35 billion yearly. However, tariff increases are affecting the global e-commerce market. Three of the five Shenzhen-based sellers interviewed by Reuters said they plan to boost prices by 30% to keep making profits, while the other two are ready to abandon the US market entirely.
Dave Fong, who sells school bags and Bluetooth speakers, has already raised prices and cut his advertising budget. "You can't rely on the U.S. market," he added, referring to a strategic shift towards Europe, Canada, and Mexico.
Brian Miller, another longtime Amazon seller from Shenzhen, noted that simple products like children's building blocks, which were once profitable at $20, may require price increases of 20-50% to be viable. He believes that if current policies continue, manufacturing may have to relocate to nations such as Vietnam or Mexico.
As smaller Chinese manufacturers struggle to cope, the broader economic impact becomes more visible. Wang warned that growing costs and market exits could cause a surge in China's unemployment rate, making this more than simply a trade issue— it's an impending economic disaster.