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Price Hikes, Supplier Swaps & Secret Deals: How Amazon & Walmart Are Surviving Trump's 60% China Tariffs
Introduction
The retail industry was about to undergo the biggest upheavals in a person's life, around three months after the President placed the 60% tariffs on China. Because of how both giants prepared for this time, Amazon's stock has dropped 12% over the last seven months, while Walmart's stock has increased by about 8%.Reveals New Information:
- Tariff-Hit Price Increases of 5–18% Types: Amazon Prime
- Currently, Wal-Mart plants in Mexico supply 45% of the goods that Wal-Mex used to buy from China.
- In the first quarter of 2025, over 32,000 Amazon small vendors shut shop.
1. The New Price Shock: Costlier Than Before
Amazon offers the following pricing types:
- "Essential": Lower increments (phone chargers +5%, for example).
- The majority of "luxury" imports are excessive spikes (gaming chairs, for example, +42%).
- Prime Day loophole: Offshore, England, Mexico, and Vietnam are readily available alternatives.
Walmart's Ingenious Workarounds:
- "Made in USA" labels on products with 51% domestic content are taken advantage of by a new FTC rule.
- Rise of private labels: "Great Value" now accounts for 38% of electronics, up from 22% in 2024.
- Walmart's average basket price increased 6.2% in April 2025 compared to Amazon's 9.8%.
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2. Supply Chain Wars: Who Was the Quickest to Leave China?
The Shenzhen Crisis of Amazon
- In March, 20% of FBA sellers who were still reliant on China had their accounts suspended.
- A new dashboard called "Diversify or Die" requires vendors to demonstrate that they do not source from China.
- Winners: Indian Vendors: Amazon India's US Exports Have Increased 300% Year Over Year
Walmart's Success with Nearshoring
- Currently, 60% of Walmart's small appliances are made at the Nuevo León megafactory.
- Coup in April 2025: took Hasbro's toy contract away from competitors in China
- The hidden cost of the tariff surge is a 22% increase in Mexican wages.
3. The Dirty Tricks: How to Get Past the System
The "Tariff Insurance" Scam on Amazon
- It is now mandatory for third-party vendors to purchase "Supply Chain Protection" ($0.30/item).
- The catch is that only 15% of the real tariff charges are reimbursed.
Walmart's Phantom Inventory
- The system displays "In Stock" for Chinese products, which are actually a Mexican counterpart.
- A class action alleging this bait-and-switch was filed on April 9.
The New Gray Market
- "Transshipping 2.0": Products are now transported via Serbia and Kazakhstan
- According to a CBP study, Chinese components are present in 1 out of 4 "Vietnam" shipments.
4. Who is winning? (A scorecard for April 2025)
| Metric | Amazon | Walmart |
|---|---|---|
| Price Increases | +9.8% avg. | +6.2% avg. |
| China Dependence | 35% of inventory (was 55%) | 18% of inventory (was 38%) |
| Seller Attrition | 32,000+ closed | 2,100+ closed |
| Stock Performance | -12% since Jan | +8% since Jan |
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5. What Happens Next?
- Forecast for May 2025: Trump may impose transshipment taxes on Vietnam
- Testing AI-generated product variations to get around tariff codes is Amazon's nuclear option.
- Walmart plans to lobby for the expansion of the "North American Free Trade Zone" as its next step.
Conclusion
While Amazon's last-minute rush is evident in its stock price and seller exodus, Walmart's planning is paying off. Sticker shock will continue to affect consumers through 2025, particularly with regard to gadgets and seasonal merchandise.
There is little denying that the retail apocalypse that was projected for 2025 has arrived, albeit in a different form than anticipated.
There is little denying that the retail apocalypse that was projected for 2025 has arrived, albeit in a different form than anticipated.
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