Overview

Amazon merchants are now facing dramatically higher import duties, with some product lines subject to combined tariffs exceeding 145 %. The surge is reshaping landed‑cost calculations, compressing profit margins, and forcing sellers to rethink inventory, pricing, and cash‑flow strategies. Understanding how these duties are applied is essential for maintaining profitability on the platform.

Key Points

• Tariff magnitude — Certain categories now incur combined duties above 145 %, more than doubling the cost of goods before they reach Amazon’s warehouses.
• Margin compression — The added duty can turn a previously profitable SKU into a loss‑making item, with some sellers reporting margin drops of 30 % or more.
• Inventory planning disruption — Higher per‑unit duties push sellers to order smaller quantities and keep leaner safety stock to limit upfront outlays.
• Cash‑flow strain — Duties are payable at import, so the larger lump‑sum payment tightens working capital for businesses that operate on thin margins.
• Classification complexity — Selecting the correct Harmonized System (HS) code is critical; an incorrect code can trigger unexpected rates or penalties.
• Pricing adjustments required — To preserve profit, many sellers must raise list prices, bundle products, or shift to items with lower duty rates.

How Tariffs Work

1. Product classification — The seller determines the HS code that best describes the item; for example, a stainless‑steel kitchen utensil might be classified under code 7323.90.
2. Duty rate lookup — Using that HS code, the seller consults the destination country’s tariff schedule; a typical entry could show a base duty of 5 % plus an anti‑dumping surcharge of 140 %, yielding a cumulative rate above 145 %.
3. Landed‑cost calculation — The seller adds the duty amount to the FOB price, freight, insurance, and handling fees; a 150 % duty effectively triples the original product cost before it arrives at an Amazon fulfillment center.