With inventories depleted, tariffs begin to “seep into” U.S. prices

(Seattle/Davos, Jan 21) As sweeping tariffs imposed by U.S. President Donald Trump drive up import costs, Amazon CEO Andy Jassy said the impact is now starting to show up in the prices of certain products. Many merchants had stocked up ahead of the higher tariffs to keep prices low, but those lower-cost inventories were largely depleted by last autumn, allowing tariff-driven costs to gradually “flow through” into retail prices.

Retailers across the industry are now working to cushion the blow from higher costs. Speaking at the World Economic Forum (WEF) in Davos, Switzerland, Jassy noted that Amazon and many third-party sellers did build inventory before the tariffs took effect, but most of that stock has been sold through—meaning consumers are likely to see the tariff impact increasingly reflected in prices.

Are price hikes unavoidable?
Jassy said sellers are taking different approaches: some are passing higher costs on to consumers through price increases, others are absorbing the costs to protect demand, and many are taking a middle-ground strategy. The effects, he added, are becoming more visible over time.

His latest comments mark a shift from last year. Months after Trump announced broad tariff hikes, Jassy said Amazon had not seen meaningful price increases. However, he also cautioned in April last year that some sellers—without sufficient margin to absorb an extra cost burden—might ultimately be forced to pass the costs on to consumers.

A major retail trade association had also warned last August that a trade war could disrupt inventory ordering plans for the spring, potentially leading to higher prices, fewer goods on shelves, and even job losses.

Consumer habits may be reshaped
Jassy said Amazon is trying to keep prices as low as possible, but in some cases increases may be difficult to avoid. Retail operating margins are typically in the single digits, he noted, and when costs rise by 10%, it becomes challenging for businesses to fully absorb them.

He added that consumers have remained resilient—continuing to spend even as costs and prices rise. Still, Amazon has observed shifts in shopping behavior: some customers are trading down to cheaper items and hunting for discounts, while others are postponing purchases of higher-priced, non-essential products.