Chinese Amazon Sellers Brace for Impact as US Tariffs Soar

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In a dramatic turn of events in the ongoing US-China trade tensions, Chinese Amazon sellers are preparing to hike prices or exit the American market entirely following a major tariff escalation announced by former President Donald Trump. The new tariffs, which are set to rise to a staggering 125% from the existing 104%, threaten to severely disrupt cross-border e-commerce operations.

A Heavy Blow to Chinese Sellers

Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association—which represents over 3,000 Amazon sellers—called the tariff hike “an unprecedented blow.”

“This isn’t just a tax issue. The entire cost structure is overwhelmed,” Wang said. “Customs delays, rising logistics costs, and mounting expenses mean survival in the US market is now in question for many of us.”

According to e-commerce intelligence platform SmartScout, China accounts for about half of all Amazon sellers. The city of Shenzhen alone hosts over 100,000 Amazon-registered businesses generating $35.3 billion in annual revenue. But these numbers could dwindle if sellers are forced to abandon the U.S. market.

Rising Prices and Market Shifts

Of the five Amazon sellers in Shenzhen interviewed by Reuters, three confirmed they are increasing product prices for American consumers, while the remaining two plan to completely exit the U.S. market.

One such seller, Dave Fong, whose product portfolio includes schoolbags and Bluetooth speakers, has already increased his prices in the U.S. by up to 30%. Fong is also reducing his Amazon advertising spend—once accounting for 40% of his U.S. revenue—and plans to redirect resources toward other regions such as Europe, Canada, and Mexico.

“We can no longer rely on the U.S. market,” he said. “We’re cutting investments there and focusing on global diversification.”

Brian Miller, another long-time Amazon seller, explained the harsh math behind the shift. A toy product that once cost $3 to manufacture in China now incurs a $7 cost with tariffs. To maintain his margin, prices would need to jump by at least 20%, with some higher-end toys seeing price hikes of up to 50%.

"If the tariffs stay, there’s no future for manufacturing for the U.S. in China,” Miller said. “Production will have to shift to countries like Vietnam or Mexico.”

A Ripple Effect on China's Economy

The tariffs’ impact extends beyond Amazon sellers to China’s broader manufacturing ecosystem, which powers platforms like Shein and Temu. In 2023 alone, China’s cross-border e-commerce trade totaled ¥2.63 trillion ($358 billion), according to the State Council.

Experts warn that small enterprises and factories reliant on exports to the U.S. may suffer significant losses, potentially driving up China’s unemployment rate.

Despite efforts to explore other markets, no region matches the scale and spending power of U.S. consumers. That reality, combined with fierce global competition, could trigger a round of price wars among Chinese exporters, further squeezing profit margins.

What’s Next?

With no sign of a trade resolution on the horizon, sellers and manufacturers alike are scrambling to adapt. Whether by hiking prices, diversifying market presence, or shifting supply chains, Chinese businesses are recalibrating for a future that may no longer include the U.S. as a core customer base.

Stay tuned as we track how these seismic changes in global trade policy continue to reshape the e-commerce landscape.