Amazon CEO "Costs May Be Passed On To Consumers Due To Tariff Impact"

Andy Jassy Amazon CEO (Source: Reuters)

Andy Jassy, Amazon CEO, expressed concerns that the tariff policy of the Trump administration could lead to price increases for some sellers. He stated that some sellers might pass on the costs due to tariffs to consumers.

CEO Jassy said in a CNBC interview on the 10th (local time), "Depending on which country you procure products from, some sellers may not be able to secure the expected margins," and "As a result, that burden is likely to be passed on to consumers." He added, "The company has proactively stocked up on inventory and took measures such as readjusting purchasing conditions to maintain product prices as much as possible."

Amazon's third-party marketplace consists of millions of sellers, and the volume they sell accounts for about 60% of all products. Many of them procure or produce products directly in China.

Recently, President Donald Trump announced a 90-day suspension of reciprocal tariffs on trade partners excluding China. However, for Chinese products, retaliatory tariffs were increased up to 145%. Therefore, some consumer movements to purchase products in advance have appeared, but CEO Jassy said, "It may be a temporary reaction, so it's difficult to judge now."

He also went on to say that the tariff policy will not impact Amazon's investments related to Artificial Intelligence (AI). CEO Jassy stated, "We are planning up to a $100 billion investment in AI technology this year, and there are no disruptions."

He also explained that Amazon Web Services (AWS) has been diversifying its supply chain for the past five years and is now sourcing parts from various countries. He stated that there are no changes to the new data center construction plans of AWS.

In the shareholder letter released the same day, Amazon revealed its policy to continue operating like the 'world's largest startup', aiming to eliminate bureaucracy within the organization and prioritize creativity and speed. Jassy emphasized, "Creative talent is stifled by bureaucracy," and "Inefficiencies deeply embedded in the organization must be eliminated."