How will China tariffs hit Amazon?
Amazon will be reporting its latest earnings in the not to distant future, and one think analysts will be looking out for is any commentary on the potential impact of Donald Trump’s tariffs.
Business reporter Kate Ainsworth took a deep dive into the “double-whammy” hitting Chinese e-commerce giants Temu and Shein thanks to the tariffs and the closing of an import duty loophole.
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Joe Kaziukenas, the founder of e-commerce intelligence firm Marketplace Pulse says that in theory, Mr Trump’s tariffs and closure of the ‘de minimis’ loophole would also impact Amazon in the US.
“Half of its sellers come from China, and it’s almost hidden in plain sight,” he said.
“When most people shop on Amazon, they don’t really think that they’re shopping from a marketplace. They also don’t really think that that marketplace is actually just a bunch of sellers in China.
“It’s exposed to … tariffs on China just as much as any other retailer, and any increases in tariffs would lead to increases in prices on Amazon.
“That’s one of the topics that I’m sure [Amazon founder] Jeff Bezos thinks about a lot, is how do they manage the US and China’s relationship? Because any changes to that has a massive impact to prices on Amazon.”
It’s unclear exactly how much of Amazon’s business model relies on Chinese-based sellers, but filings to the US Securities and Exchange Commission last year stated that they made a significant contribution to its revenue from third parties, and any regulatory or trade restrictions “could adversely affect our operating results”.
There is also the possibility that Amazon may be granted an exemption by Mr Trump to avoid the tariffs altogether, economist Dean Baker says.
“He’s already announced that he would exempt Apple with their iPhones from the tariff because the head of Apple made a big contribution to his Inaugural Committee,” he said.
Read the full story here:
ASX to dip as Wall St turns negative, Amazon earnings ahead
Happy Friday! I’ll be taking you through the morning’s market action.
We’re in the last hour of the session on Wall Street, and stocks have turned slightly negative — that’s setting the ASX up for a dip at the open here.
It was a different story in Europe overnight, while London’s FTSE rallied strongly after the Bank of England cut rates and signaled further easing ahead.
The Aussie dollar is down slightly against the US dollar currently, after making ground back overnight to around 62.80 US cents.
In the US, Amazon will report its earnings after the closing bell, so we’ll bring you that new shortly.
Market snapshot
- ASX 200 futures: -0.4% to 8,450 points
- Australian dollar: -0.1% to 62.79 US cents
- S&P 500: -0.1% to 6,550 points
- Nasdaq: -0.1% to 19,678 points
- FTSE: +1.2% to 8,727 points
- EuroStoxx 600: +1.2% to 544 points
- Spot gold: -0.3% to $US2,856/ounce
- Brent crude: -0.5% to $US74.21/barrel
- Bitcoin: -0.7% to $US96,286
Prices current around 7:15am AEDT.
