Amazon CEO Reveals Tariffs Inflating Product Prices on CNBC
Amazon CEO Andy Jassy recently addressed rising product prices influenced by tariffs during an interview with CNBC. He indicated that U.S. tariffs, implemented during Donald Trump’s presidency, have started to affect consumer pricing on the company’s e-commerce platform.
Impact of Tariffs on Amazon’s Pricing Strategy
According to Jassy, Amazon had strategically increased inventory shipments early last year. This approach aimed to help third-party sellers manage costs linked to tariff-related shipping increases. However, Jassy noted that the inventory advantage started to diminish in the fall.
Consumer Reactions to Price Changes
Jassy highlighted that sellers are responding to these evolving cost pressures in various ways:
- Some sellers are passing increased costs to consumers.
- Others are absorbing costs to maintain demand.
- Some are employing mixed strategies.
Despite the price changes, consumers have shown resilience, continuing their shopping habits. However, Jassy observed a caution among shoppers regarding higher-priced discretionary items. He expressed optimism about overall consumer behavior but acknowledged uncertainty about future trends into 2026.
Company Performance Amid Economic Challenges
While Amazon had previously reported minimal impacts from tariffs on consumer behavior and prices, the current situation marks a shift. The company continues to expand its product range and improve delivery timelines to sustain demand against rising costs.
The increasing prices and broader economic concerns are now critical topics within the U.S., especially as they relate to the upcoming midterm elections. Jassy’s comments come amidst significant discussions among global leaders at the World Economic Forum in Davos, Switzerland.
As for Amazon’s stock performance, shares dropped by 2.7% early in the trading day, reflecting a broader market weakness. In contrast, Coca-Cola’s outgoing CEO stated that their company remains “relatively immune to tariffs,” citing manageable impacts due to localized manufacturing.
