US Imposes 145% Tariff on Chinese Goods, Sparking Fears of Trade Embargo

As the trade tensions between the US and China escalate, a significant proportion of Amazon's products, estimated to be around 60-70%, are sourced from China. This has serious implications for the e-commerce giant, as the recent tariff hikes imposed by the US on Chinese goods are set to have a significant impact on Amazon's third-party sellers. According to Amazon's CEO, Andy Jassy, the company is still assessing the impact of the tariffs on its own brand products, but third-party sellers will inevitably pass on the increased costs to consumers, potentially leading to a price surge.

The tariffs are also forcing Chinese sellers to reconsider their business strategies, with some planning to exit the US market and focus on other regions such as Europe and Canada. Others are reducing their inventory and advertising budgets to mitigate the effects of the tariffs. US-based brands that rely heavily on Chinese supply chains are also feeling the pinch, with SimpleMorden, a US-based brand, estimating that it will lose over $40 million this year due to the tariffs.

The situation is not limited to Chinese sellers, as the tariffs are expected to have a broader impact on the US economy. Goldman Sachs predicts that Amazon's self-operated business could lose billions of dollars in profits, and other giants such as Apple and Nike facing price increases. The iPhone price, for example, could rise by as much as 43%. Chinese scholars argue that the US approach of raising tariffs will not solve its economic problems and instead may increase inflationary pressure and the risk of economic recession.

Moreover, the escalating trade tensions between the two nations pose a substantial risk of economic decoupling, which could have significant implications for the global economy. The US has imposed a 125% tariff on Chinese goods, while China has vowed to take all necessary measures to defend its rights and interests. The Chinese government has announced plans to adjust its economic policies to mitigate the impact of the tariffs, including increasing support for domestic industries and encouraging foreign investment.

However, the Chinese government's confidence in its ability to withstand the tariffs has been questioned by some experts, who point out that the country's economy is still heavily reliant on exports and that the tariffs will have a significant impact on Chinese businesses and workers. The US has been working to reach agreements with other countries to cut off China's access to global markets, which could further exacerbate the trade tensions. As the trade tensions continue to escalate, it remains to be seen how the situation will play out, with far-reaching consequences for the global economy.