Quit or raise prices by more than three times: The ‘devil and deep sea’ dilemma for Chinese sellers in the US

Chinese companies selling products on Amazon are grappling with the "devil and deep sea" dilemma of either hiking prices significantly or exiting the US market entirely. The situation arises from President Donald Trump's decision to raise tariffs on Chinese imports to a staggering 125%, up from the already high 104%.
The tariff increase has left Chinese sellers struggling to manage costs, which are now overwhelming their existing business models. Wang Xin, the head of the Shenzhen Cross-Border E-Commerce Association, which represents over 3,000 Amazon sellers, described the situation as unprecedented. She told Reuters, "This isn't just a tax issue—it completely disrupts the cost structure. It'll be very hard for anyone to survive in the US market."
In addition to higher tariffs, sellers are also facing customs delays and rising logistics costs, further complicating their operations.
Many sellers are considering their options, with some planning to increase prices and others looking to shift focus to alternative markets. According to Reuters, three out of five Shenzhen-based Amazon sellers said they would raise prices in the US, while two indicated plans to exit the market altogether.
Dave Fong, who sells schoolbags and Bluetooth speakers, has already raised prices by up to 30%. He plans to let inventory levels fall and reduce advertising spend on Amazon, which previously accounted for 40% of his U.S. revenue. Fong said, "The US market is no longer reliable. We need to redirect investments to regions like Europe, Canada, and Mexico."
Brian Miller, another Amazon seller for seven years, highlighted the impact on production costs. For instance, building blocks for children that cost his company $3 to produce would now cost $7 with the tariffs. Maintaining margins would require price hikes of 20%-50% depending on the product.
China accounts for nearly half of Amazon's sellers, with more than 100,000 businesses based in Shenzhen alone, generating annual revenues of $35.3 billion. The tariff hikes not only risk pushing many sellers out of the U.S. market but could also lead to higher unemployment rates in China's manufacturing sector.