Amazon’s Tariff Climb Down

Today has seen a classic example of how the Trump administration’s rapid response to events can bring about rapid change. Speaking at the White House during a briefing to mark the Trump administration’s 100th day in office press secretary Karoline Leavitt tore into plans that Amazon was preparing to provide customers with the cost of Trump’s tariffs next to the price of products on its website. “This is hostile and political act,” she insisted, adding further, “Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?” Despite the concern, she declared that the anticipated move by Amazon was “not a surprise,” highlighting a 2021 report in Reuters that noted how Amazon had “partnered with a China propaganda arm.” This, Leavitt insisted, was “another reason why Americans should buy American.” The incident then prompted a direct phone call from the president to Amazon owner, Jeff Bezos, a move that led to a swift retraction by the company. In a statement provided to The Washington Post, also owned by Bezos, Amazon announced that “The team that runs our ultra low cost Amazon Haul store has considered listing import charges on certain products. This was never a consideration for the main Amazon site and nothing has been implemented on any Amazon properties.”

So. Job done, story over. What transpired today appears to have been a concerted effort by the White House to get ahead of the story and prevent Amazon from ever implementing this pricing policy by shaming the company into acquiescence. By bringing in comparisons to the inflation that occurred under the previous administration, the Trump White House has cornered Amazon into an apparent submission by not wishing to be seen as favoring one party over another. It is, of course, interesting, that the Amazon denial of this policy was issued by the Washington Post, a publication also owned by Jeff Bezos, which has itself been the focus of Donald Trump’s ire due to its reporting and inclination to favor Democratic candidates and policies.

The suggestion that Amazon planned to reveal any price increases that were due to increased tariffs also carried with it the all too obvious risk that Amazon would be revealing just how many of its goods were imported, which could well have led to a backlash at a time when there is a concerted effort to repatriate manufacturing and to get Americans to buy goods that are made domestically when possible. In light of what appears to be an immediate move by Amazon to refute this story, and the willingness of the Trump administration to be so quick to get ahead of the story, other companies may well be forced to think twice before considering any effort to include any line item detailing the impact of the tariffs.

The tariff strategy has so far not hindered the Trump administration’s dealings with tech companies, and has, instead, been a driving force behind several high-profile decisions to repatriate manufacturing to the United States, or, in the case of Apple, away from China. It has also announced that companies who repatriate will be able to off-set the costs involved, as Treasury Secretary Bessent has emerged as perhaps the most critical member of the administration in such matters.

If the tariffs begin to impact the cost of production, then it is likely that those overheads will eventually be passed on to the consumer, especially by smaller firms who cannot afford to merely assume such increases. Much will depend upon the ability of the UK government to strike a deal with the United States in the coming weeks and months to prevent this from happening. The tariffs themselves are designed to do just this: drive foreign nations to the negotiating table to agree new, bilateral agreements with the United States and end what the Trump administration sees as a system that has penalized US exports, driven manufacturing jobs overseas, and led to the rapid rise of China as a world economic power.

The tariffs are part of a multi-pronged policy, designed to address a systemic problem with the US economy that has seen real wages fall for decades, along with the standard of living, causing people to be working harder for less. The White House strategy is to cut a trillion dollars from the federal deficit by reducing government waste and over-employment, to make permanent the tax cuts it introduced in its first term, eliminate taxes for those earning under $200k, and eliminate taxes on tips and overtime. This is being done in a series of Executive Orders and forms the central component of the budget that is currently making its way through Congress.

The incident should be viewed ominously by Kier Starmer’s government in London, which really does need to get a much firmer grip on its policies and its messaging. It does itself no favors to be forecasting a trade deal with the EU at the exact time that the Chancellor is in Washington seeking to assure the White House of the priority that Downing Street places on securing a new bilateral trans-Atlantic trade agreement.