How Trump Reciprocal Tariffs will affect Amazon sellers

Last Updated: April 4, 12:13am EST Evolving situation. For informational purposes only. For custom tariff planning, connect with an Amazon strategist here (free call): https://calendly.com/asteroidx-call/amazon-strategy-call Tariff Basics

A tariff is a tax on imported goods. It raises their price to protect domestic industries or generate government revenue.​

Who pays the tariff? (was Warren Buffett said: "well, the toothfairy doesn't pay 'em!")

The importer pays the tariff, then usually passes the cost to consumers via higher prices.

The White House hopes to revitalize US manufacturing, encouraging companies to make stuff in America instead of importing.

List of Reciprocal Tariffs (announced April 2, 2025)

Here's a ​​​​full list of countries and their tariffs from the New York times, but the most relevant tariffs for Amazon sellers are:

🇨🇳 34% on goods imported from China in addition to existing 20%, bringing the total to 54%!). Coming into effect on April 9, 2025.

🇮🇳 27% on India​

​🇻🇳 46% on Vietnam

🇰🇭 49% on Cambodia​

🇵🇰 30% on Pakistan

🇧🇩 37% on Bangladesh​

🌎 10% baseline on all countries not mentioned in the NYT list above​

Recall: these numbers are assuming that nothing changes! Vietnam & Israel have already dropped their tariffs on US goods to 0%. Other countries are likely coming to the negotiating table, as well. But in the meatime:

High Chinese tariffs are going to squeeze profit margins.

​And, frustrating for sellers who diversified their supply chains out of China just to face more tariffs! However, it's worth noting that Latin America was largely left alone (at least for now). This is largely due to the fact that Latin America already does more business with the US, so the trade deficit isn't as significant as with other countries. For example, I recently attended a Flexport tariff webinar and they provided this helpful example:

Here's another for the automotive industry:

Plus:​

The de minimis exemption is getting cut, meaning that shipments from China valued under $800 (which used to enter the U.S. duty-free), will now be subject to tariffs and customs inspections. This hampers China-based fast fashion companies like Shein, Temu, etc.

Target countries can remove the US-imposed tariffs in 2 ways:

​(1) Make stuff in America instead, i.e. set up factories state-side

(2) Arrange bilateral concessions. Dropping tariffs on US goods; buying more US goods.

That's the current situation.​​​​

What to do now?

A few strategic moves come to mind. I'll continuously update this page as we navigate the situation with our brands.

(1) International expansion. Selling on Amazon Canada, Amazon Mexico and Amazon UK don't present these problems and the supply chain can stay the exact same.

(2) Break SKUs into parts, have consumers do some assembly IKEA style, lessen packaging, ship without batteries-- these can help margins in the short term

(3) Adding US-based SKUs. ThomasNet is a good fit for this. It's like Alibaba but for US suppliers. (4) Tactically, it makes sense to map your entire supply chain ("from dirt to shirt"), map out points of origin, and calculate potential tariff exposure. File away all costs/Bill of Materials (BOM) in case US customs disputes any values. -

Here's a good perspective from Ryan Petersen, CEO of Flexport:

"Companies are looking for clarity but they should assume that this the start of the process, not the end. The administration wants to send a message to let everyone know they are dead serious. The tariffs on many of these countries are likely to come back down as they come to the table to make a deal. Businesses need more certainty to make investment decisions for their supply chains, and while today starts to paint a clearer picture about what the new rules of the game will look like, the reality is that we will have to wait for the process to play out before we can really understand the new landscape of global trade."​​​​​

BONUS: Trump Psychology

Trump's book The Art of the Deal helps to explain his approach to tariffs.

I read it a couple months ago.

Here's 4 passages that stood out:​

“I don't do it for the money. I've got enough, more than I'll ever need. I do it to do it. Deals are my art form. Other people paint beautifully on canvas or write beautiful poetry. I like making deals, preferably big deals. That's how I get my kicks." (page 1)

"That really got me going. I said to the guy: ‘You listen to me. If you do foreclose, I'll personally bring a lawsuit for murder against you and your bank, on the grounds that you harassed Mrs. Hill's husband to his death.’ All of a sudden the bank officer sounded very nervous and he said he'd get right back to me. Sometimes it pays to be a little wild. An hour later I got a call back from the banker, and he said ‘don't worry we're going to work it out Mr. Trump.’” (page 5)​

"My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I'm after. Sometimes I settle for less than I sought, but in most cases I still end up with what I want."  (page 45)

​"I like thinking big. I always have. To me it's very simple: if you're going to be thinking anyway, you might as well think big. Most people think small, because most people are afraid of success, afraid of making decisions, afraid of winning. And that gives people like me a great advantage. My father built low income and middle income buildings in Brooklyn and Queens, but even then, I gravitated to the best location. When I was working in Queens, I always wanted Forest Hills. And As I grew older, and perhaps wiser, I realized that Forest Hills was great, but Forest Hills isn't Fifth Avenue. And so I began to look toward Manhattan, because at a very early age, I had a true sense of what I wanted to do. I wasn't satisfied just to earn a good living. I was looking to make a statement. I was out to build something monumental— something worth a big effort. Plenty of other people could buy and sell little brown stones, or build cookie cutter red brick buildings. What attracted me was the challenge of building a spectacular development on almost 100 acres by the River on the west side of Manhattan, or creating a huge new hotel next to Grand central Station at Park Avenue and 42nd Street." (page 46)

What I take from this:

- hiking tariffs up to historically high levels is a place to "aim high" from. The tariffs are the start of a conversation, not the end of one

- ​he identifies as a dealmaker. So, he's going to sit down with these countries and some deals will be struck (because that's what he enjoys doing). It may not be enough to help Asia-based e-commerce supply chains, but more on that later​

- he likes making a splash for marketing purposes. He wants to "make a statement" And it's quite the statement when put in historical context!

- Plan for the upcoming tariffs with with an Amazon strategist here (free call): https://calendly.com/asteroidx-call/amazon-strategy-call