The news: Amazon is pushing suppliers to lower prices to reflect reduced tariff rates on Chinese imports, according to a Financial Times report.

• The retailer is reportedly seeking concessions ranging from the low-single digits to as much as 30%.
• However, Amazon has expressed a willingness to accept smaller discounts if suppliers agree to pay tariff duties directly and increase spending on marketing and promotions.

The rationale: Amazon’s aggressive approach to seller negotiations indicates that the retailer views near-term tariff risks as a less potent threat this year.

• That may be because duties on some Chinese goods have come down considerably—although that could change if President Donald Trump follows through with his threat to impose a 25% duty on countries that do business with Iran.
• But it could also reflect anticipation that the Supreme Court will overturn tariffs in their current incarnation, which would require the government to return the roughly $150 billion in tariff revenues it has generated thus far to sellers and importers.

What’s next for tariffs: It looks likely that the Supreme Court will rule against the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs. However, any relief will only be temporary. The executive branch has at least five other means of imposing tariffs, some of which would take longer to implement. But the net effect would likely be the same—namely, higher import costs and continued uncertainty.

Implications for retailers: Retailers need to take full advantage of any tariff reprieve. While most lack Amazon’s bargaining power, companies may be able to use the Supreme Court ruling to extract concessions from suppliers (assuming the court strikes down the country-specific tariffs).

At the very least, sellers should move quickly if any reduction in tariff rates materializes. With the Lunar New Year set to shut down factories in China next month, companies will need to get their orders in fast to ensure inventory is sufficient for the spring and summer seasons.

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