Amid tariff hikes, Amazon cuts some inventory orders from China

Amazon has cancelled various Chinese and other Asian product orders, leaving its vendors confused. According to Bloomberg, the cancellations started shortly after US President Donald Trump announced tariffs on products from over 180 countries, including China, Vietnam, and Thailand.

The items impacted are beach chairs, scooters, air conditioners, and other household items. These cancellations were made without notice, causing vendors to think they were directly connected to the impending tariffs.

One long-time beach chair vendor stated they were emailed by Amazon that some of the orders were “placed in error” and were not supposed to be shipped. The chairs had already been produced at this point, and now the vendor is left holding a $500,000 order that they must sell elsewhere.

The email didn’t mention tariffs, but the vendor said such cancellations had never happened in their decade-long relationship with Amazon. The sudden change has created serious problems for sellers, many of whom now face financial losses.

VENDORS FACE BIG RISKS AS AMAZON CHANGES COURSE

As reported by Bloomberg, a former Amazon manager turned online seller consultant, Scott Miller, corroborated that a number of his customers had cancellations as well. He mentioned that Amazon provided neither explanation nor notice.

“Amazon really holds all the cards,” Miller explained, noting that vendors now have limited options — either sell products in other countries at lower profits or find new retail partners.

The majority of the orders that were cancelled were “direct import orders.” In this practice, Amazon purchases items in the nation in which they are produced and sends them straight to US warehouses.

Amazon covers the import fees when the items arrive in the US. These types of purchases enable Amazon to save money on bulk shipping. However, by cancelling those orders, the company is passing the buck — and the expense — of importing the products onto the vendors.

This shift is important since products that Amazon purchases directly are responsible for about 40% of all the items sold through its platform. The remaining are sold by third-party sellers that utilise Amazon’s site and service to access their customers.

The firm did not make any public statement regarding the cancellations, but it did mention in a recent report that international trade is a serious business threat. “China-based suppliers supply substantial portions of our components and finished goods,” the report said.

The effect of these tariffs is being felt well beyond Amazon. Companies throughout the US are increasing prices, and economists are speculating on a potential economic slowdown. Investment firm Robert W. Baird & Co. recently reduced its 2025 revenue estimate for Amazon based on the tariff issues. Amazon’s shares have fallen around 21% so far this year, while the general S&P 500 index is off 15%.

ALSO READ: Boycott US products: Consumers around the world push back against Trump tariffs