Warren asks Amazon’s Jassy about scale, timing of price hikes

Warren asks Amazon’s Jassy about scale, timing of price hikes

Amazon’s Jassy on Tariffs, Price Hikes, and AI-Driven Growth

In a recent discussion with financial analysts and investors, Amazon CEO Andy Jassy addressed concerns about the scale and timing of price increases linked to President Donald Trump’s sweeping tariffs. Jassy acknowledged a shift in Amazon’s stance, noting that while the company initially mitigated tariff impacts through forward buying and inventory pre-deployment, the effects are now "creeping into some of the prices" as pre-stocked inventory has run out according to CNBC reports.

Jassy explained that Amazon’s 2 million third-party sellers are responding differently to the added costs. Some are passing expenses to consumers, while others absorb costs to maintain demand or adopt hybrid strategies. "Retail is a mid-single-digit operating margin business," he emphasized, stating that "there aren't a lot of places to absorb" a 10% cost increase. This admission marks a reversal from earlier remarks in July 2025, when Jassy claimed Amazon had not seen "prices appreciably go up".

The CEO highlighted Amazon’s efforts to keep prices low, including working with sellers to avoid excessive markups. However, he conceded that price hikes may become unavoidable as tariff-related costs persist. Meanwhile, consumers are adapting by trading down to lower-priced items or delaying discretionary purchases.

Beyond pricing, Jassy reiterated Amazon’s focus on AI and automation as growth drivers. He cited AWS’s strong Q4 performance— $35.58 billion in revenue, up 2.1% from estimates —and emphasized investments in AI infrastructure, custom silicon, and robotics. These initiatives, he argued, will enhance efficiency and offset some retail margin pressures.

For investors, the key questions remain: How quickly will tariff-driven price hikes scale, and how will Amazon balance cost management with maintaining competitive pricing? Jassy’s evolving comments suggest a more cautious outlook, but the company’s AI and operational innovations may yet offset some near-term challenges.

Amazon Q4 2025 earnings report: The data reflects AWS's strong Q4 performance. CNBC interview, July 2025: Jassy's initial statement about price increases. Davos interview, January 2026: Jassy's updated comments on pricing. Fortune, January 2026: Jassy's remarks on operating margins.