Why is U.S. customs law helping Amazon and China, and not U.S. manufacturers and retailers?
03 November 2021
By Charles Benoit
Last year, Amazon AMZN earned a staggering $21 billion. And much of that profit came directly from Amazon’s position as China’s online marketing machine. China now accounts for roughly 40% of all Amazon sales, and an estimated 75% of all new sellers on Amazon are Chinese companies.
Unfortunately, domestic U.S. manufacturers and retailers are on the losing end of this arrangement. Beijing already massively subsidizes its state-owned factories—which allows them to charge artificially low prices.
But a 2016 change to U.S. customs law has actually helped Amazon to import even more Chinese products—and to do so while avoiding U.S. tariffs, taxes, and regulatory oversight. Unless Congress acts, Amazon will keep helping Chinese companies seize more market share from U.S. manufacturers.