Amazon’s Jassy says Trump’s tariffs are pushing up prices

Amazon CEO Andy Jassy said President Donald Trump’s broad tariffs are starting to be reflected in the prices of some products as sellers weigh how they can absorb the shock of additional costs.

Amazon and many third-party sellers pre-purchased stock to avoid tariffs and keep prices low for customers, but most of that supply ran out last fall, Jassy said in an interview Tuesday with CNBC’s Becky Quick at the World Economic Forum in Davos, Switzerland.

“So you start to see some tariffs creep into some prices, some products, and you see some sellers deciding to pass those higher costs on to consumers in the form of higher prices, some deciding to absorb it to increase demand, and some doing something in between,” Jassy said. “I think you’re starting to see more of that impact.”

The comments are a notable change from last year, when Jassy said Amazon had “not seen a significant increase in prices” several months after Trump announced sweeping tariffs.

Last April, Jassy also predicted that some merchants may have to pass on the additional cost of tariffs to consumers because some businesses “don’t have that 50% extra margin to play with.”

Amazon sellers have previously told CNBC that they are considering or have already increased the price of some products due to rising import costs in the wake of tariffs.

Last August, a major retail trade association warned that the trade war would loom over companies’ inventory ordering plans this Spring, leading to higher prices, fewer products on shelves and job losses.

Jassy said Tuesday that Amazon tries to “keep prices as low as possible” for consumers, but in some cases price increases may be unavoidable.

“At a certain point, because retail is, you know, a mid-single-digit operating margin business, if people’s costs go up 10%, there’s not a lot of places left to afford that,” Jassy said.

“You don’t have endless options,” he added.

Consumers remain “pretty resilient” and are still spending amid the tariffs, Jassy said. But these are affecting some shoppers’ buying habits, he said, with Amazon observing that some people gravitate towards lower-priced items and hunt for bargains, while others avoid buying higher-priced optional items.