"Anticipating" tariff rebates? Amazon negotiates 'price cuts' with suppliers before Supreme Court ruling.

Amazon is negotiating price reductions with suppliers, aiming to take back concessions made last year in response to Trump’s tariffs.

On January 14, according to the UK Financial Times, several consultants representing brands and suppliers revealed that e-commerce giant Amazon is seeking price cuts from suppliers, ranging from single digits up to as much as 30%.

The report, citing sources familiar with the matter, stated that in order to clinch deals before the Supreme Court rules on the legality of U.S. trade tariffs this week, Amazon not only brought forward negotiations with some suppliers by several weeks, but in some cases even tried to impose a January 1 deadline.

Amazon said in a statement that its annual supplier negotiation cycle has not changed, and that there is no strict deadline for negotiations. The company stated that it began negotiations with some suppliers after tariff rates were reduced last October.

Last year, Amazon agreed to raise purchase prices for some goods affected by tariffs in exchange for suppliers guaranteeing minimum profit margins. However, as Trump rolled back some tariffs and reached a series of trade agreements, the impact of tariffs was not as severe as originally feared, and Amazon is now seeking to reverse those concessions.

A Head Start Before the Supreme Court’s Ruling

The U.S. Supreme Court is expected to rule this week on whether the Trump administration has the authority to impose tariffs under the International Emergency Economic Powers Act.

The UK Financial Times, citing supplier consultants, reported that although Amazon’s supplier managers did not explicitly mention the case during negotiations, the move to speed up talks is seen as an effort to clinch agreements before the ruling.

Martin Heubel, a consultant assisting suppliers in negotiations with Amazon, said:

Amazon’s position is that the worst-case scenario brands feared did not occur.

After Trump rolled back some tariffs and signed multiple trade deals, the impact of tariffs has indeed been mollified. However, analysts note that if the U.S. Supreme Court strikes down the current tariffs, Trump could launch another round of tariffs based on other laws.

Last year, facing the massive tariffs Trump introduced in April, the world's largest e-commerce platform made concessions, agreeing to increase purchase prices for goods hit by tariffs. Former Amazon supplier manager and current consultant Kara Babb pointed out:

Amazon is taking aggressive measures to try to recover all lost profits.

According to reports, Amazon is attempting to shift future trade volatility risks to suppliers, asking them to agree to take responsibility for tariffs on goods sold. Amazon indicated that if suppliers agree to take on tariffs and increase marketing spending, it could accept a smaller price reduction.

Suppliers Face Profit Pressure

Brands and their consultants believe Amazon’s stance in the latest negotiations threatens the profitability of product lines, as it does not fully consider supply chain disruptions and rising commodity, raw material, and labor costs.

Amazon operates its vast e-commerce business through both direct sales and third-party retailer models, with sales from third-party sellers accounting for over 60% of the platform’s total sales. Amazon responded:

We work closely with suppliers to understand all the cost pressures they face—tariffs, supply chain, raw materials, labor—and take these factors into account during negotiations.

It is noteworthy that Amazon has not joined lawsuits against tariff measures brought by corporations and interest groups, which include a class-action suit by over 1,000 retailers such as Costco seeking to recover tariffs already paid.

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