Trump’s policies have shaken Amazon

Volatility and uncertainty are rattling Amazon employees, suppliers, and sellers as a sudden wave of new tariffs takes effect. The turmoil has made forecasting and planning almost impossible, forcing teams to scramble for answers as President Donald Trump’s evolving trade policy shakes the largest e-commerce retailer in the United States. 

On Thursday, the market took a dramatic turn, wiping out roughly $2.5 trillion from the S&P500 Index. Amazon’s stock was among the hardest hit, sliding even further on worries of ongoing tariff threats.

An internal email obtained by Business Insider shows how Amazon’s supply chain teams are grappling with a near-impossible task. One of the company’s biggest supply chain units warned that the “volatility and uncertainty” stemming from new tariffs made it too difficult to create accurate second-quarter forecasts. 

These tariffs, outlined by Trump earlier in the week, bring added risk for Amazon’s retail operations. The email stated that while the near-term impact is likely to appear in a later forecast, the exposure to a global trade war remains “a large risk” for the company.

According to multiple employees, suppliers, and sellers, Amazon has provided little support or financial flexibility to cope with the fallout. Many spoke on the condition of anonymity because they were not authorized to discuss their dealings with the press. The tension is rising, and worries of a prolonged trade war or a possible economic slump weigh on their minds. An Amazon spokesperson did not respond to requests for comment, leaving vendors and workers with few official updates.

In some cases, Amazon employees have reached out to first-party vendors—companies that sell their merchandise wholesale to Amazon—to talk about tariff-related price increases. Several vendors described how Amazon has been unwilling to absorb any cost hikes, even as supplier expenses climb. 

The email, viewed by Business Insider, shows an Amazon employee urging a vendor to look for other ways to cut manufacturing or shipping costs. The email advised seeking out subsidies or operational efficiencies before raising wholesale prices. “We understand the challenges posed by the current economic and trade environment,” the email read. “However, we believe there are alternatives to direct cost increases that haven’t been fully explored.”

Certain vendors also reported that Amazon is looking for “margin agreements” to keep Amazon’s own margins the same, even if a vendor increases its prices. In other words, if a supplier raises costs because of the tariffs, Amazon wants assurances that the percentage it earns remains stable. 

In some instances, the retail giant has paused or postponed shipments from vendors to keep a close eye on these market shifts. One shipping company informed a vendor that it was holding the pick-up schedule for products “as per Amazon’s request,” apparently to offset the immediate impact of tariffs.

Third-party Amazon merchants on Amazon may increase their prices 

Meanwhile, third-party merchants on Amazon’s marketplace are also starting to feel the pinch. President Trump’s sweeping tariff increases on many countries are expected to drive up prices for countless consumer goods. 

Youssef Squali from Truist Securities predicted an adverse effect on e-commerce sites, including Amazon. Squali wrote in a note that increased import costs may cut into retail margins, though the true impact on different online businesses might take time to emerge. 

Several independent sellers say that they may have to raise retail prices for products to offset new fees. However, not all marketplace sellers view the tariff changes as unwelcome. 

According to Oliver Scutt, a board member of Merchant AI, a few are pleased that the government removed the “de minimis” exemption that had allowed tax-free shipments of Chinese imports valued under $800. They believe it will reduce competition from platforms like Temu and Shein, which often rely on low-cost international shipping to attract budget shoppers. 

The confusion became especially clear during Thursday’s market tumble, when one supplier emailed an Amazon manager to request more guidance on how to handle the new rules. 

They received only a brief reply in return: “Rest assured, we are looking into it.” That phrase, according to those inside Amazon’s network, captures the collective anxiety across the company’s ecosystem. 

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