Amazon cancels some orders from China amid Trump tariff concerns

Amazon.com Inc. has canceled orders for products made in China and other Asian countries, as per a Bloomberg report.

The move is seen as a direct response to sweeping tariffs imposed by US President Donald Trump

The cancellations, involving goods such as beach chairs, scooters, and air conditioners, signal the e-commerce giant’s efforts to reduce exposure to rising import costs.

The cancellations began shortly after Trump’s April 2 announcement targeting imports from over 180 countries and territories, including major manufacturing hubs like China, Vietnam, and Thailand.

The report quoted one longtime vendor, who received a cancellation notice for a $500,000 order of China-made beach chairs, said the email from Amazon claimed the order had been placed “in error” and should not be shipped.

The vendor, now left with unsold inventory and factory bills, called the move unprecedented in over a decade of working with Amazon.

Scott Miller, a former Amazon vendor manager and now CEO of e-commerce consulting firm pdPlus, confirmed to the business publication that multiple clients have experienced similar cancellations for direct import orders.

These transactions, where Amazon is the importer of record, place the onus of tariffs on the company.

Pulling back on such orders shifts the cost burden to vendors if they choose to import goods themselves.

“Amazon really holds all of the cards,” Miller said. “The only real recourse vendors have is to either sell this inventory in other countries at lower margins or try to work with other retailers.”

Amazon's play to avoid Trump's tariffs

Roughly 40% of Amazon’s sales come from direct purchases from vendors.

The rest are fulfilled by independent merchants who use Amazon’s platform and logistics services.

By cutting back on direct import orders, Amazon is reducing its own tariff liability while pushing the risk downstream to suppliers.

The company acknowledged trade tensions as a material risk in its annual filing in February, stating that “China-based suppliers provide significant portions of our components and finished goods.”

While the full scope of the cancellations remains unclear, the decision reflects broader concerns over supply chain costs and profit erosion due to protectionist policies.

Trump's tariff war takes a toll on Amazon stock

The trade war has already taken a toll on Amazon’s stock. Shares are down about 22% year-to-date, outpacing the S&P 500’s 15% decline.

Despite the fall, several Wall Street analysts remain bullish on the internet giant.

On Tuesday, Cantor Fitzgerald reaffirmed its Overweight rating on Amazon.com, citing robust growth in its cloud computing segment, Amazon Web Services (AWS).

The brokerage highlighted that AWS posted approximately 25% year-over-year growth in 2024, surpassing its 20% target.

General Artificial Intelligence (GenAI) contributed 3-5 percentage points to this growth, with that figure expected to double to 10 points in 2025.

The firm pointed to Amazon’s continued focus on innovation in cloud and AI as a core reason for its positive outlook.

Wedbush Securities also maintained its Outperform rating on Amazon with a price target of $280.

The firm noted Amazon’s growing traction in digital advertising, supported by its expansive merchandise range and access to rich customer data.

Wedbush emphasized Amazon’s 11% annual revenue growth and $638 billion in sales as signs of ongoing momentum in the Broadline Retail sector.