Common goods’ prices to rise soon? Here’s what Amazon CEO Andy Jassy warns about

Amazon CEO Andy Jassy has cautioned that the price of common goods might rise. This warning comes as the US government considers new tariffs. The potential changes could affect many retailers and consumers. Jassy shared these views in an interview with CNBC’s Andrew Ross Sorkin on 'Squawk Box' on Thursday.

Consumer Prices

Jassy said the proposed tariffs by the Trump administration could lead to higher costs. These increases would likely be passed on to buyers. Many Amazon sellers work with small profit margins. This makes it hard for them to absorb new costs. Jassy noted the risk of macroeconomic problems. He said price hikes could reduce consumer spending or cause inflation.

Uncertainty in Supply Chain

Jassy mentioned the company is preparing for changes in product demand. He avoided naming China directly, though many sellers source goods there. CNBC's Andrew Ross Sorkin brought up China's large role in Amazon's supply chain. Jassy said it is too early to know how things will unfold. The company is trying to manage customer experience amid uncertainty.


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Efforts to Keep Prices Stable

Amazon is taking steps to limit price hikes. This includes buying popular products in advance. The company is also renegotiating contracts with suppliers. Jassy said they are doing what they can to maintain current prices for customers. Still, he admitted that many unknowns remain.

Other Companies Also Affected

Jassy noted that other major companies, such as Walmart and Delta, are also concerned. He said it is common for businesses to worry in such situations. The possible outcomes include lower demand and higher inflation. Jassy stressed that it is still too soon to know the exact effects.

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Ongoing Talks with US Government

Jassy confirmed that Amazon often speaks with the US administration. These talks include tariff issues and how they affect consumers and businesses. He said the government is aware of Amazon's concerns. However, Jassy did not comment on reports linking Amazon to a possible TikTok bid.

Market Reaction

Amazon stock dropped over 6% on Thursday. Despite this, it rose more than 8% over the week. The share price reached a high of $242.06 on February 4.

FAQs

Why might Amazon raise prices on basic goods?
Amazon may raise prices due to US tariffs. Sellers facing higher import costs might pass those on to customers to avoid losses.

How is Amazon planning to manage price hikes?
Amazon plans to buy popular items in advance and renegotiate supplier deals to reduce the impact of potential price increases.