Amazon forced into major change as it slashes product orders and Walmart follows suit with stark warning over prices
AMAZON and Walmart have both been forced into making massive changes after President Donald Trump announced sweeping global tariffs.
Big hitting retailers who source from all over the world are watching with bated breath as Trump threatens to impose a baseline 10% reciprocal tariff on nearly every US good.
While Trump initially threatened to charge countries like Cambodia up to 97% reciprocal fees, he announced on Wednesday that he was reducing the taxes to a baseline 10% and started a 90-day pause.
However, the break does not apply to China, which is now facing a 125% price hike as the two countries launch an all-out trade war.
Despite the temporary relief in some countries, the impact of the tariff war continues to shake up major retailers.
AMAZON SHAKE UP
Amazon has canceled several product orders from suppliers in China and other Asian nations, which vendors believe is a direct response to the tariffs, Bloomberg reported.
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The company's decision follows Trump's announcement of tariffs targeting over 180 nations, including China, Vietnam and Thailand.
The cancelation hits hard, with vendors left scrambling to cover losses.
One vendor, who had worked with Amazon for over a decade, said a $500,000 order was axed after the beach chairs were already manufactured.
Amazon hasn't commented on the cancelation, but experts believe the timing signals a response to the tariffs.
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The tech giant had already flagged trade disputes as a risk factor in its annual report.
Meanwhile, Walmart, the nation's largest retailer, is warning of significant challenges as it navigates the uncertainty caused by tariffs.
CEO Doug McMillon assured investors that the company’s commitment to low prices remains strong, but acknowledged vulnerabilities in the current climate, Associated Press reported.
"Nothing about the current environment impacts our confidence in our business or our strategy," McMillon said in an investor meeting.
Despite a strong year, Walmart has now pulled back on its profit guidance for the first quarter, citing tariff risks.
In Bentonville, Arkansas, Walmart executives noted that sales have been volatile this quarter.
The company is working to keep prices competitive but admits that higher tariffs could make it harder to maintain low prices, especially for its lower-income customers.
What items will be affected by the tariffs?
AMERICANS should prepare to see significant prices changes on everything from avocados to cars under President Donald Trump's new global tariffs.
Here is a list of some of the everyday products that could see a massive price tag surge.
- Coffee
- Tea
- Bananas
- Foreign-made cars
- Sneakers
- Furniture and other home goods
- Pharmaceuticals
- Video games
- Clothing
- Toys
- Washers and dryers
- Avocados
- Housing materials
WALMART PRICES HIT
McMillon emphasized that while price gaps are crucial to Walmart’s strategy, the company may have to take lower profit margins on some items to maintain flexibility during this period of rising costs.
Walmart, which sources two-thirds of its merchandise domestically, is not immune to the impact of tariffs.
Groceries, which make up 60% of Walmart's business in the US are particularly vulnerable to price hikes.
The company's cautious approach follows the latest round of tariffs that came into effect on Wednesday, with China retaliating by raising tariffs on American goods to 84%.
These developments are rattling the global economy and fueling fears of a recession.
For Amazon, the changes are more immediate.
Amazon’s cancellation of direct import orders, where it buys products wholesale overseas and handles imports, has disrupted vendors, leaving them to manage the tariffs on their own.
This shift puts the financial burden back on the suppliers, as they may now have to absorb additional costs.
Why has Trump hit China, Canada, and Mexico with tariffs?
DONALD Trump has imposed 10% tariffs on Chinese imports and Beijing has retaliated. Trump also hit Canada and Mexico with 25% tariffs, but walked back many of them on March 6
China:
- Trump believes China has not done enough to stop the production of chemicals used to make the drug fentanyl.
- China has slammed Trump for the claim and described fentanyl as America's problem.
- The country also said the tariffs are a "serious violation" of the World Trade Organization rules.
- China is filing a lawsuit with the WTO against the US for "wrongful practice."
- China serves as a major supplier of auto parts to the US.
- Phones, computers, and other key electronic devices were also in the top imports from China last year, according to Commerce Department data.
- In 2023, the US imported around $427 billion worth of products from China, according to the US Census Bureau.
- Data reveals that 78% of all smartphones imported from the US came from China.
- Trump's tariff threat has sparked fears of price rises for fashion items and toys.
- Beijing has responded by outlining its own tariffs on American goods, sparking fears of an all-out trade war between the two superpowers.
Canada:
- Trump ignited a trade war with Canada and Mexico during his first days in office as part of a campaign promise to stop the flow of fentanyl and illegal immigrants into the United States.
- He said both countries had not done enough to halt the drug flow and the mass influx of migrants from reaching US soil.
- A total of 59 pounds of fentanyl was seized at the northern border by US agents between 2022 and 2024, according to the Canadian government.
- Meanwhile, almost 62,000 pounds of the drug was seized at the southern border.
- The 25% tariffs Trump proposed on Canadian goods were destined to come into force on March 4.
- Canada responded with a 25% tariff on $155 billion of American imports.
- On March 6, Trump warned the 25% tariff on steel and aluminium would come into force on March 12.
- Ontario Premier Doug Ford responded with a 25% surcharge on electricity exported to Michigan, Minnesota, and New York.
- Trump then threatened to double the 25% tariff to 50%.
- The Ontario premier warned that he "will not hesitate to increase" the levies or completely shut off power to the three US northeastern states.
- Both sides then agreed to talk and toned down their threat.
- Ford then paused the electricity surcharge.
Mexico:
- Mexico has managed to twice postpone Trump's tariffs on Mexican goods.
- On February 1, Trump signed an executive order to impose tariffs on imports from Canada, Mexico, and China.
- But, on February 3, Trump agreed to pause the levies against Canada and Mexico after the countries took steps to appease Trump's concerns on border security and drug trafficking.
- Trump then threatened that the 25% tariffs would come into force on March 4.
- Two days later, Trump announced a delay on most goods covered under the US-Mexico-Canada Agreement.
- Trump credited Mexican President Claudia Sheinbaum's progress on border security and drug smuggling as a reason for the pause on the levies.
- The Mexican Navy has seized thousands of kilograms of drugs from criminal gangs.
- Sheinbaum promised to deploy 10,000 extra troops to the Mexico-US border.
- Still, Trump has maintained that on April 2, the US will begin imposing reciprocal tariffs on all its trading partners, including Mexico.
Scott Miller, a former Amazon vendor manager, said many of his clients experienced canceled orders.
"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," Miller said.
As tariffs bite, analysts are adjusting their forecasts for Amazon.
Robert W. Baird & Co. reduced its 2025 revenue forecast for the e-commerce giant, citing the ongoing impacts of trade wars.
Despite facing a sharp decline in stock value, Amazon’s shares are down 21% this year, compared to the S&P 500’s 15% slump, the company has not made any major public moves to address the cancellations.
Walmart’s McMillon, for his part, said the company will continue to monitor the evolving trade situation and adapt its strategy accordingly.
But with prices rising, the company is prepared to make difficult decisions to maintain its competitive edge.
The trade war’s long-term effects are still unclear, but both retail giants are bracing for a rocky road ahead.
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As inflation and tariffs continue to escalate, shoppers may soon feel the pinch at the checkout.
Amazon and Walmart didn't respond to requests for comment by The U.S. Sun.