Chinese manufacturers and distributors, hit by President Donald Trump‘s tariffs, are reportedly proposing illegal strategies to U.S. Amazon (NASDAQ:AMZN) sellers to reduce their tariff duties.
What Happened: Some Chinese suppliers are suggesting that U.S. Amazon sellers understate the value of their imported goods. This unlawful tactic is aimed at decreasing the tariff duties under the new tariff regime. The suppliers are also recommending another method known as Delivery Duty Paid (DDP) shipping, where they would handle customs clearance and misrepresent the shipment’s value, reported Fortune after accessing several emails and WeChat messages.
Amazon did not immediately respond to Benzinga’s request for comment.
Some suppliers are contemplating reducing their wholesale prices or establishing manufacturing facilities in nations facing lower tariffs than China. Meanwhile, U.S. Amazon sellers are worried about their China-based competitors potentially undervaluing their imports to cut costs.
An anonymous founder of a medium-sized household goods company confirmed these proposals, expressing concern for smaller importers who might unknowingly land in legal trouble following such advice.
Several U.S.-based Amazon sellers have expressed suspicion that some China-based competitors deliberately undervalue their imports to cut costs. "They aren't held accountable for customs fraud, and the tariffs will drastically increase their competitive advantage," a U.S. Amazon seller told Fortune.
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What Happened: This announcement follows a week of global tariff attacks by President Trump, during which most U.S. imports from China were hit with a steep 145% tariff. As a consequence, businesses with supply chains tied to China are now scrambling to find alternatives.
Earlier this month, reports suggested that Amazon halted orders worth over $500,000 from China, Vietnam, and other Asian countries in response to Trump’s tariff plans. This move left vendors with unsold inventory and rising costs.
Amazon’s CEO, Andy Jassy, warned that the new tariffs could result in higher prices for consumers as sellers might pass on the additional costs. Amid these challenges, the illegal tariff evasion proposals from Chinese suppliers add another layer of complexity for U..S Amazon sellers.
Notably, entrepreneur Mark Cuban predicted that the tariffs would be detrimental for Amazon but beneficial for American sellers. However, the current situation suggests a more complicated scenario, given that many American sellers source from China.
- READ MORE: When Apple’s Tim Cook Revealed The Real Reason iPhones Are Made In China--And It’s Not ‘Low Labor Costs’: ‘China Stopped Being A Low-Wage Country Years Ago’
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
