unforeseen tariff hikes, as sellers and the head of China’s largest e-commerce association stated.
Trump also said on Wednesday that the tariffs would rise when it comes to China’s imports to 125% from the 104% level already in effect, escalating the high-stakes confrontation between the two world’s biggest economies. Wang Xin, the head of the Schenzen Cross-Border E-commerce Association, which even represents more than 3,000 Amazon sellers.
“It'll be very hard for anyone to survive in the U.S. market,” she reported to Reuters, mentioning that the tariffs could also be leading to customer delays and even higher logistics costs. “So for all of us in the cross-border e-commerce business today, this is truly an unprecedented blow."
Even more so, Wang said that some of the sellers are also looking to increase prices in the US, while others on the other hand are looking to find new markets. It is also worth mentioning that China is the home of nearly half of Amazon’s sellers, with over 100,000 Amazon businesses counting as registered in the southern city of Shenzhen alone, helping generate an annual revenue of $35,3 billion, according to e-commerce services provider SmartScout.
China is also the place where manufacturing bases of other major e-commerce platforms like Shein and Temu are located. Imports and exports involving cross-border e-commerce were evaluated at 2.63 trillion yuan, meaning $358 billion last year, as the State Council of China has mentioned.
As you would also expect, there is no other country that comes even close to the U.S. consumption power, significantly limiting the production that the rest of the world can absorb, raising the risks of triggering bigger price wars.
Dave Fong, who has products ranging from schoolbags to Bluetooth speakers, as they said on Thursday, mentioned that the prices in the US have risen up to 30% and would let inventory levels fall, triggering lower spending on Amazon advertising fees. Fong also said, "For us and anyone else, you can't rely on the U.S. market, that's quite clear," adding, "We have to reduce investment, and put more resources into regions like Europe, Canada, Mexico, and the rest of the world.".
Brian Miller, a seller from Amazon who had sold products from Shenzhen for several years, said that he did not see a reason to develop new products in the current market, anticipating that he would need to raise the prices of his products in order to remain on the platform, reported Reuters.
Saying that “I don’t see a scenario, if things don't change, that serving the U.S. from China is viable anymore and manufacturing that serves the U.S. will have to be transferred to other countries like Vietnam, or Mexico,".
The impact on prices can also lead to a massive surge in China’s unemployment rates.
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