This week the Trump Administration threatened to increase tariffs on $200 billion dollars worth of Chinese goods from 10% to 25%. Which raises the question… is the US in a trade war with China – AND – more importantly, what does this mean for Amazon sellers who import their products from China to sell in the US?
This week we’ll take a look at what these turbulent trade negotiations between the US and China mean for Amazon sellers … as well as consumers. Let’s dive in.
- Trump said Sunday that tariffs on $200 billion worth of goods would increase from 10% to 25% despite repeated claims that trade talks were going well
- Trump also threatened to impose 25% tariffs on an additional $325 billion worth of Chinese goods currently untaxed. If Trump follows through this would effectively mean that all imports from China would see a tariff of one form or another
Without getting too much in the weeds here – it’s worthwhile to understand that the proposed tariff increases are all about intellectual property and unfair trade practices, and, in theory, center around high-tech goods that the US doesn’t like China specializing in. Currently, the 10% tariff proposed to increase does not affect the typical Amazon seller.
These tariffs are on goods in the industrial and tech industries mainly. That said, if the US government decides to follow through on its threat to increase tariffs for the second bucket almost all Chinese goods will be affected.
Chinese delegates are meeting with US officials this week for a final round of discussions to see if a deal can be made before the increased tariffs take effect Friday. It’s tough to say what will happen before Friday – The Chinese Commerce Ministry said that if the US tariff measures are implemented, it would take “necessary countermeasures.” The US and global stock markets are witnessing dips this week in preparation for whatever the fallout may be.
How Will the Trade War Affect you as an Amazon Seller?
You might be asking yourself what does this trade-war mean for Amazon sellers and consumers? Well, you guessed it. Most sellers source their items from China and tariffs are taxes paid by importers on foreign goods so a 25% tariff imposed by the US on all Chinese goods would be paid by sellers first, and consumers second. For businesses slapped with tariffs, there are few choices to make up the losses: slash costs, maintain costs while the bottom line takes a hit, pass the higher costs on to customers, or, look to source elsewhere.
None of these options are great – and the bottom line is everyone will be affected by increasing tariffs. BUT there is still a lot that can happen throughout the next 24 hours – currently, the tariffs only affect a small set of sellers. For now, our best bet is going to be to keep our fingers crossed that negotiations continue and that the second bucket of items ends up not being affected.
If you want to learn whether your products will be affected, here are the HS codes that are jumping to 25%.
It’s moments like these where individuals tend to jump on a bandwagon of negativity and shout about how this will affect their business, losing sight of the fact that competitors and the like are going to be affected the same. More importantly, it’s easy to forget what this means in the long term. Like how the American market just became a lot less attractive to Chinese sellers. Or the fact that global marketplaces aren’t affected by these tariffs – like Australia which is quickly becoming the fastest growing Amazon market in the world.
It is our job as entrepreneurs to see opportunity where others do not – especially in a landscape where the rules have changed for everyone. As everyone – across the board – adjusts to these tariffs, only the successful and tenacious sellers will come out on top. And if you’re the type of person tuning into content like ZonTRENDS to keep your ear to the pavement on what’s happening in the industry you are already in the 1% of sellers that are going to take this trade war and turn it into a business advantage rather than a disadvantage.
Make sure to watch our video below and join the conversation! We have some important actionable items that can help ensure that you use this marketplace shakeup to your advantage!