Breaking! Amazon Asks Chinese Suppliers to Cut Prices by 30% to Offset Tariff Impact

On January 13, 2026, according to the Financial Times, Amazon, the world's largest e-commerce platform, is pressuring suppliers to provide discounts of up to 30% to offset potential tariff impacts.

This action primarily targets suppliers of goods from China, aiming to protect Amazon's profit margins and maintain its platform's competitive low prices.

Amazon's specific actions and discount requirements:

⚠️ Discount Range: Amazon requires discounts ranging from low single digits (e.g., 2-5%) to as much as 30%, depending on the product category and supplier size. Some reports mention "low double-digit" (e.g., 10-19%) discount requirements, particularly for categories like electronics and home goods that are significantly affected by tariffs.

⚠️ Negotiation Tactics: Amazon has accelerated its annual negotiation cycle, typically starting a few weeks earlier, and has shifted the responsibility for tariff payments, additional marketing, and promotional expenses to suppliers in exchange for smaller discount concessions. In 2025, Amazon had agreed to increase payments to suppliers for goods affected by tariffs to ensure minimum profit margins; now, it is trying to reverse these concessions, arguing that the actual tariff impact is smaller than expected (with Trump having rolled back some tariffs and reached certain trade agreements). Additionally, Amazon has taken other measures, such as importing goods from China early to avoid taxes, canceling some orders from China, and considering (but later denying) displaying tariff surcharges on its website.

⚠️ Affected Categories: This primarily targets imported goods from China. Many products on Amazon are imported directly from China or through third-party sellers, such as electronics and household items. As the world's largest e-commerce platform, 60% of Amazon's sales come from third-party sellers, who either source products from China or are Chinese sellers themselves (as of November 2024, Chinese sellers account for over 50% of the marketplace). The remaining 40% of Amazon's sales come from self-operated products, many of which are also sourced from Chinese factories.

The supplier consultant pointed out that Amazon is actively taking measures to recover lost profits. Amazon stated that it would consider all cost pressures in negotiations, including tariffs, supply chain, raw material, and labor costs.

Reports indicate that Amazon's move aims to expedite negotiations before the U.S. Supreme Court makes a ruling on the legality of tariffs.

Cause Analysis:

📌 Profit Protection: Goldman Sachs estimates that tariffs could lead to a 6% to 12% reduction in Amazon's operating profit this year, which equals $5 billion to $10 billion. Amazon's profit margins are already thin, and it compensates for rising costs by encouraging price cuts to maintain its commitment to low prices for consumers.

📌 Strategic Response: The U.S. Supreme Court is expected to rule this week (expected on January 14, 2026, Eastern Time) on the legality of Trump's tariffs. If the court overturns the tariffs, Amazon suppliers will benefit; conversely, if the tariffs are upheld or continued through alternative legislation, the tariff pressure will persist. However, Amazon has not participated in the anti-tariff lawsuit (such as the class action by over 1,000 retailers like Costco) and has instead opted for internal adjustments.

How is the supplier responding?

Suppliers and consultants describe Amazon as an "800-pound gorilla," emphasizing that brands are highly dependent on its platform and have no other choice. However, they argue that these demands fail to adequately consider supply chain disruptions, rising raw material and labor costs, which may threaten product profitability.

Some sellers have reported that if they try to raise their selling prices on the platform to cope with tariffs, Amazon will penalize them (such as losing the "Buy Box" position).