Tariffs, Deals, and the Power of Scale: Why Trump’s new accords can’t replicate the Amazon‑China playbook

Jeff Bezos speaks of seven‑to‑ten‑year bets; Beijing’s Communist Party drafts plans through 2035 and beyond.

By Athan Joshi

In the past fortnight, President Trump has unveiled seven bilateral accords—Vietnam, Indonesia, the Philippines, the EU, the U.K. and, most dramatically on July 23, Japan’s pledge to invest $550 billion in U.S. industry in exchange for a 15 percent tariff cap on Japanese exports. With the August 1 reciprocal‑tariff deadline looming, the White House touts the spree as proof tariffs can co‑exist with fresh foreign money and market access. Supporters call it momentum while critics see these as headline deals masking deeper structural gaps.

Whether these pacts succeed is an open question, but they set the backdrop for a larger lesson: scale, not weak barriers, usually determines who wins the long game. Few stories illustrate that better than the parallel rises of China, from workshop to manufacturing hegemon, and Amazon, from online bookseller to the operating system of retail and cloud.

Amazon and China’s playbooks look uncannily alike

China began exporting toys and T‑shirts in the 1980s, then sprinted up the value chain to smartphones, high‑speed rail, and electric vehicles. Amazon launched as an online bookseller in 1994, perfected one‑click logistics, and now spans groceries, streaming, and cloud computing. Both giants first dominated a narrow niche, harvested its data and supplier links, and ploughed those gains into conquering adjacent markets.

Razor‑thin margins with positive cash flow became their preferred moat. Chinese firms recycled export surpluses into ports, rail, and R&D, while Amazon pumped every spare dollar into fulfilment centers, Prime perks, and data farms. The objective was market dominance, not early profit, a model that forced rivals to burn cash they couldn’t match. The fallout is plain: Midwest foundries, Southeast‑Asian garment shops, Sears, Toys “R” Us, and even eBay all ceded ground. 

Underlying everything is command‑and‑control vision with a long horizon. Jeff Bezos speaks of seven‑to‑ten‑year bets; Beijing’s Communist Party drafts plans through 2035 and beyond. Free from quarterly course corrections, activist investors, coalition politics and pressure of daily stock market moves, both keep pouring cash into ports, robots, or cloud capacity even when tariffs, trade wars, or digital‑services taxes bite.

Why 10‑15 percent tariffs won’t “re‑shore” by themselves

President Trump’s new baseline: 15 percent for allies, up to 50 percent for hold‑outs feels muscular, but history says incremental duties barely dent entrenched supply chains. A modern factory depends on clusters of tool‑and‑die shops, skilled labor and component suppliers that gradually vanished from the US over the last three decades. Re‑creating them is slower than global buyers pivoting to Vietnam or Mexico. Unless tariffs approach prohibitive levels or are paired with vast industrial subsidies, the center of gravity stays offshore.

Europe’s Digital‑Services Tax was sold as a way to “make Amazon pay.” In practice, sellers, not Seattle, swallowed the bill: prices on Fulfilment‑by‑Amazon goods rose up to 2.6 percent after DSTs took effect. That cost passed through to shoppers while Amazon’s share barely budged. Adding a U.S. “market‑dominance fee” which is what tariffs essentially are, would likely repeat the pattern unless genuine logistics alternatives bloom.

Lessons from China and India’s domestic e‑commerce playbook

Today’s Chinese challengers Alibaba, Temu to Amazon surged only after foreign platforms were effectively shut out of China. eBay’s China site collapsed by 2006, its market share plunging from 79 percent to 36 percent as domestic upstart Taobao enjoyed regulatory favor and free listings. Amazon’s domestic marketplace followed, closing in 2019 with under 1 percent share. Beijing’s combination of localization rules, data‑residency demands and informal pressures, not a 3 percent sales tax created the space for home‑grown giants.

Yet, exclusion is not the only path. In India, Amazon faces insurgents that rewrote the rule‑book for local conditions. Meesho built a 187‑million‑user base letting millions of micro‑sellers reach tier‑2 and tier‑3 shoppers the warehouse‑centric Amazon model struggles to serve. Zepto and Blinkit hooked impatient urbanites on 10‑minute grocery runs, forcing Amazon to bolt a “Now” tab onto its app just to stay in the game.

The parallel is clear: if the United States truly wants a home‑grown manufacturing renaissance, nudges will not suffice. Either erect a near‑total barrier as China did in e‑commerce or create a market environment that lets smaller players compete on speed and price.

The nuclear option and its fallout

A 100 percent embargo on Chinese imports would, in theory, force domestic production. It would also raise consumer prices, strain multinational supply chains, spark WTO litigation and risk retaliation on U.S. farm and service exports. The dollar’s reserve‑currency premium could erode if global partners conclude Washington is an unreliable buyer. The US dollar has already seen its value erode by over 10% in 2025. Simply put: the American economy can survive a full China decoupling, but not without a multi‑year transition plan, large public subsidies and political tolerance for short‑term inflation.

China and Amazon conquered their realms by building ports, rail lines, data centers, last‑mile vans while others debated policy tweaks. Tariffs and platform taxes may shift bargaining positions, yet they rarely unwind entrenched scale advantages. Unless Washington is prepared for a near‑total import ban, an experiment fraught with economic shock, the wiser move is to catch the next transformative wave, just as Amazon surfed the internet and China rode WTO‑driven free trade.

The real lesson is not that protection wins, but that scale married to relentless reinvestment wins. If the US truly wants to “reshore”, it must seed alternative flywheels, not just change the scoreboard’s tariff and tax column. Until then, China will keep shipping and Amazon will keep delivering.

(Athan Joshi is a Rising Junior at Los Altos High School with interest in politics, economics and business.)

Views are personal and do not represent the stand of this publication.)