Amazon CEO Andy Jassy says consumers are beginning to see higher prices as sellers look to absorb added costs from President Donald Trump’s tariffs. Jassy told CNBC that Amazon and many of its third-party sellers stocked up on inventory ahead of the tariffs to keep prices low, but most of that supply ran out last fall.
He explained that sellers are now responding in different ways. Some are passing the higher costs on to consumers in the form of higher prices, some are choosing to absorb the costs to drive demand, and others are taking a middle path. Jassy stated that the impact of these tariffs is becoming more visible.
This marks a shift from last year, when Jassy said prices had not risen following the initial announcement of the tariffs. He noted on Tuesday that while Amazon is trying to keep prices low, increases may be unavoidable in some cases. Jassy pointed out that retail operates on mid-single digit margins, so when costs rise by ten percent, there are limited options to absorb the hit without raising prices.
Despite the tariffs, Jassy observed that consumers remain fairly resilient. He said some shoppers are shifting to cheaper items and hunting for bargains, while others are postponing premium discretionary purchases.