White House Backlash Erupts as Amazon Tariffs Cause Sellers to Flee Prime Day Over 145% Cost Spikes
Amazon is in a heated dispute with the Trump administration following news that the e-commerce giant planned to tell customers the prices of products they are buying would also include costs from tariffs, a move the White House blasted as “hostile and politically motivated.” The backlash comes as third party sellers flee from Prime Day 2025 as 145% tariffs on Chinese products crush profit margins and remake global supply chains.
White House Accuses Amazon of “Political Hostility”
White House Press Secretary Karoline Leavitt slammed Amazon for exploring a feature to itemize tariff costs on product pages, calling it a deliberate attack on U.S. trade policy. “Why now? This is a political stunt targeting American workers,” Leavitt stated, framing the move as opposition to Trump’s efforts to revive domestic manufacturing. Amazon clarified that the feature was only tested on its budget-focused Amazon Haul platform and not its main site.
The clash highlights escalating tensions between the administration and businesses grappling with aggressive tariffs on Chinese imports, which took effect April 9, 2025. These levies disproportionately impact Amazon’s third-party sellers, who supply 62% of goods sold on the platform.
Prime Day Exodus: Sellers Prioritize Survival Over Discounts
Faced with soaring costs, sellers are abandoning Prime Day 2025 in droves:
- Steve Green (bicycle and skateboard seller): Skipping Prime Day for the first time since 2020 to avoid tariff-driven losses.
- Kim Vaccarella (Bogg Bag CEO): Shifting production from China to Cambodia and Vietnam, diverting inventory to retailers like Macy’s.
- MedCline: Avoiding discounts on $250 therapeutic pillows despite prior Prime Day success.
Analysts warn the retreat could dent Amazon’s Prime Day revenue, which hit $14.2 billion in 2024. Sellers face an impossible choice: absorb tariffs (eroding 15–20% margins) or raise prices and risk losing buyers.
Amazon’s Response: Price Hikes and Supply Chain Shifts
Amazon CEO Andy Jassy acknowledged the strain, noting sellers may “pass costs on to customers.” Data reveals:
- Price Surges: Over 900 products saw average price hikes of 29%, including electronics and apparel.
- Supplier Shifts: Sellers pivot to Vietnam, India, and Taiwan to bypass tariffs.
Amazon downplays the impact, claiming fewer than 1% of items faced significant increases.
Economic Fallout and Market Reactions
- GDP Concerns: Tariff-driven import spikes may trigger a Q1 2025 GDP contraction.
- Stock Volatility: Amazon shares dipped 2.2% pre-market post-White House remarks.
- Consumer Sentiment: 73% of Americans view the economy negatively, per recent polls.
The Road Ahead: Trade Wars and Transparency
The White House defends tariffs as a tool to boost U.S. manufacturing, but critics warn of inflation and supply bottlenecks. Meanwhile, platforms like Temu and Shein already list tariff costs, pressuring Amazon to follow suit.
Disclaimer: This article is for informational purposes only. Policy details and corporate strategies are subject to change. Consult official sources for updates. Not financial advice. © 2025 FinanceTract. All rights reserved.
