Amazon paying the price for Trump's tariffs as sales fall, UPS balks

• Amazon sales fall as worldwide tariffs take effect.
• The company backs off breaking out the price of the tariffs when the White House objects.
• UPS announces it is "firing" Amazon, its biggest but not most profitable customer.

It wasn't too long ago that Amazon founder Jeff Bezos was pictured smiling as he and other tech mavens met with President Trump. But not everything that has happened since then has given Bezos much to smile about.

Amazon finds itself facing numerous challenges as Trump's tariffs begin to be felt. The most obvious is a sharp fall-off in sales of Chinese goods, which make up a large portion of the Amazon site. Another is the fall-out from declining sales, as UPS announces it is "firing" Amazon, its biggest but not most profitable customer.

The most obvious challenge: rising prices. CNBC reports that Amazon merchants are hiking prices for everything from diaper bags and refrigerator magnets to charm necklaces and other top-selling items.

E-commerce software company SmartScout tracked 930 products on Amazon that have seen increased prices since April 9, with an average jump of 29% in categories, including clothing, jewelry, household items, office supplies, electronics and toys, according to Reuters.

Itemize the per-item cost

Not wanting to take the heat for higher prices, Amazon considered breaking out how much the tariffs added to the cost of each item on its site. But an irate call from none other than President Trump put an end to that, at least for now. 

"Jeff Bezos was very nice. He was terrific,” Trump told reporters on Tuesday. “He solved the problem very quickly. Good guy.”

Whether consumers will be so happy with that attempt at a solution remains to be seen, not that there's much they can do about it. 

And then there's UPS. It has announced that it will be cutting about 20,000 jobs and closing 73 buildings after splitting the blanket with Amazon, which until recently was its biggest customer.

Amazon has, of course, been steadily building its own delivery network, which may partly account for the UPS decision but there's no debate that orders for Chinese goods are down. 

A gauge of new export orders fell in April to its lowest reading since Covid-19 was ravaging the country in 2022, the Wall Street Journal reported, while overall manufacturing activity in China was the weakest in more than a year. 

'A hell of a fight'

Another piece in this global chess match is the Teamsters Union, which represents UPS drivers and warehouse workers. Amazon has said that most of the job reductions will be made from managerial ranks -- and the Teamsters say they will make sure that's the case.

Sean O’Brien, the Teamsters president, said UPS is obligated to create 30,000 new Teamsters jobs under the current contract. He said the union wouldn’t object if UPS downsizes management but “UPS will be in for a hell of a fight” if it moves to eliminate Teamsters jobs.

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