Is Amazon affected by tariffs

**Amazon is affected by tariffs**, and the impact is multifaceted: 1. **Tariff Impact on Imports**: Mexico's recent tariff changes aim to benefit Amazon and MercadoLibre by increasing costs for Asian competitors like Shein and Temu, who previously benefited from exemptions. Amazon, with 30% of its goods sold in Mexico imported, stands to gain the most. However, MercadoLibre, which sources 15% of its goods from abroad, largely from China, may see some negative effects due to increased costs, but "the overall effect should be net positive" on reduced competition. 2. **Trump's Proposed Tariffs**: Proposed tariffs on Chinese imports could significantly affect Amazon, which sources goods from China through its FBABA program. A 10% tariff could, for example, slash profit margins for FBABA clients, who already operate with thin margins. Additionally, Amazon's ability to compete with Chinese marketplaces on price could be compromised if it cannot offset the costs of tariffs through other means. 3. **Amazon's Responses to Tariffs**: Amazon has responded to tariff threats by taking measures such as withdrawing operations in Quebec to cut costs. It has also explored ways to avoid tariffs, such as shifting to alternative suppliers. Furthermore, Amazon has implemented new programs like "Haul," a shopping experience targeting price-conscious consumers with items under $20, in response to competitors like Temu. 4. **Tariffs' Impact on Competitors**: Tariffs could level the playing field for Amazon's competitors, such as Walmart, which have also been exploring ways to avoid tariffs. This could increase competition for Amazon in the retail market. In conclusion, while Amazon may benefit from recent tariff changes in Mexico, it faces significant challenges from proposed tariffs on Chinese imports. The company's responses to tariffs, including sourcing strategies and new business initiatives, will be crucial in navigating these trade tensions.