Amazon's stock tumbles amidst escalating tariff crisis

On April 4, 2025, Amazon, the world's largest online retailer, experienced a decline in its share price by 2%, largely attributed to the ongoing tariff announcements by President Donald Trump. These tariffs particularly impact the costs of imported goods, especially those sourced from China, which constitutes a significant portion of Amazon's product offerings. Analysts estimate that between 40% and 70% of Amazon's products are sourced from outside the U.S., most of which are from China. This has created increased pressure on Amazon as the company's profit margin was already measured at 9% in 2024. Amazon founder and chairman Jeff Bezos has been cautious in publicly addressing the ongoing tariff issues while managing his relationship with President Trump. These tariffs, initially seen as a tool for negotiating better trade deals, have raised concerns about their long-term implications for Amazon and the consumer market. Specifically, if the tariffs remain for an extended period, both sellers and consumers will likely face higher prices. Analysts suggest that the added costs will have to be absorbed by the supply chain or eventually passed on to consumers. Despite these challenges, Amazon's diversified customer base may provide a buffer compared to its competitors, such as Walmart and Target, who are also reshoring and diversifying their supply configurations. Amazon operates with a large number of third-party sellers on its platform, mitigating some of the direct burden of tariff costs. However, industry experts warn that if tariffs remain in place, the resulting price increases could lead to a decline in consumer spending, posing significant risks to both Amazon and its competitors. The announcement to close the 'de minimis' trade loophole—which previously allowed goods under a value of $800 to enter the U.S. duty-free—could also impact competition between Amazon and low-priced rivals such as Shein and Temu. As the effects of these tariffs unfold, it is too early to determine the full scope of their impact, but the economic landscape remains volatile.