Lauren Sanchez, Jeff Bezos, Sundar Pichai and Elon Musk (left to right) at President Donald Trump’s inauguration.
Saul Loeb/AFP/Bloomberg
The world’s richest retail boss, Amazon’s founder and chairman Jeff Bezos, has been carefully tending to his relationship with President Donald Trump. Since the election, Bezos has cozied up to him, congratulating him publicly on X and attending his inauguration, to which Amazon donated.
At least publicly, he’s also been careful with what he’s said about tariffs. In an X post in March, Bezos wrote that his Washington Post’s opinion pages could cover the “damaging and distorting effects if tariffs are used to pick winners and losers.” Late Wednesday, Trump announced a flat 10% tariff, plus higher rates for many of America’s largest trading partners, including 34% on China. On Friday, China hit back with a matching 34% tariff–which, when combined with its existing tariffs, brings the total to 54%.
Against the backdrop of the biggest two-day stock market drop since 2022, Amazon sure looks like a loser. The world’s largest online retailer is heavily reliant on goods manufactured in China. Shares slid 9% on Thursday April 3 (vs. the Nasdaq’s 6%), wiping $16 billion from the net worth of the world’s second-richest person. On Friday, Amazon’s share price is down another 2% as of 1:30 p.m.
It’s clear that tariffs will increase the cost of imported goods, particularly those sourced from China, according to Helena Wang, analyst at Phillip Securities. “This isn’t good for anybody, and it’s not good for Amazon,” says Gil Luria, analyst at D.A. Davidson.
The hardest-hit products? Electronics, apparel and household goods, where Amazon relies heavily on Chinese manufacturing, according to Phillip Securities’ Wang and Jeffrey Wlodarczak of Pivotal Research Group. Apparel, which comprises an estimated 10%-15% of Amazon’s retail revenue, may be especially impacted, says Luria and Wlodarczak. While Amazon doesn’t disclose the percentage of products sourced from outside the U.S., the analysts that spoke with Forbes estimated that anywhere from 40% to 70% of Amazon’s products are sourced from outside of the U.S., with most of that coming from China.
But there’s a silver lining: Forbes spoke with four analysts, three of whom said the tariffs—if they last—could put Amazon at a competitive advantage.
“This is not an Amazon-targeted tariff. This is global … which means everyone else is going to be facing the exact same pressure as Amazon is,” says Nicholas Jones, an equity research analyst at Citizens Capital Markets and Advisory. “Your costs may go up, but you’re likely still to go to Amazon because they’ll deliver it tomorrow, right? Amazon has the advantage of convenience.”
Plus Amazon is in the enviable position of having options for how it responds. Luria explains that there are three “levers” at play: Amazon could increase prices that consumers pay, push down already-low margins on its suppliers or absorb the increase itself—leading to its own lower margins. (Amazon had a 9% profit margin in 2024.) Luria thinks Amazon will mostly rely on the former two, but “if Amazon feels like these tariffs may not either come to fruition or stay in effect for very long,” it might temporarily choose to take the hit on margins in some categories. But the longer the tariffs stay in effect, according to Wang, “sellers and consumers are likely to bear the burden.”
“The magnitude of the tariffs are large, and the longer they are in effect, the more likely they will be passed onto consumers,” Amit Khandelwal, a professor of global affairs and economics at Yale, says in an email to Forbes. Import prices increased soon after the tariffs went into effect during Trump’s first administration, he added.
A spokesperson for Amazon didn’t return a request for comment before publication.
Over time, as consumers and sellers absorb more of the associated costs, Amazon could come out on top. “Just because it’s expensive on Amazon doesn’t mean it’s going to be cheaper at Walmart, Target, Best Buy or anywhere else,” says Citizens’ Jones. “These things are coming from the same places.” Because Amazon has “the best logistics network and best ability to source alternatives, they should be relatively well positioned to peers,” Wlodarczak adds. And according to Luria, Amazon’s customer base is more diversified than most of its competitors, which could help the company if the tariffs acutely affect a particular subset of customers.
Plus, Amazon has a strong balance sheet, which could help it avoid absorbing the brunt of the tariffs’ impact. That’s in part thanks to Amazon’s high-margin cloud services business, AWS, which generated 17% of the company’s net sales but 60% of its operating income in 2024 and is unlikely to be severely affected by tariffs. Amazon does make some of its AI chips in Canada and Israel, but the company’s response, if any, may be to make fewer chips and invest less in data centers, which would lower Amazon’s capital expenditures, according to Luria.
Trump’s new regulations could also help Amazon in its competition against ultra-low-priced, China-based Shein and Temu. As part of his executive order announcing the tariffs, Trump also closed the “de minimis” trade loophole, which allows goods worth less than $800 to enter the U.S. duty-free. That’ll hit Shein and Temu harder, because most of their goods are cheap, while not all of Amazon’s are. Also, compared both to Shein and Temu and to traditional retailers like Walmart, Amazon doesn’t source and price all of its own products—it has a huge swath of third-party sellers using the Amazon platform, so therefore Amazon would bear less of the burden of tariff costs, per Wang. However, she adds that Amazon’s competitors like Walmart and Target have “also been aggressively reshoring and diversifying supply chains, which may give them a slight advantage in certain product categories.”
Still, it’s too early to tell exactly what will happen, especially if the tariffs end up being more of a negotiating tool than a full-out trade war that could potentially lead to a recession. The latter would lead to a drop in consumer spending, which would be the biggest risk to Amazon and its competitors, Wlodarczak says.
In the meantime, analysts remain bullish on Amazon, at least when it comes to share price. Sixty-one of the 76 analysts who cover Amazon have given it a buy rating, and no one has yet downgraded in response to Trump’s new tariffs. “The valuation is very attractive,” Luria says. The tariffs “are profound changes to the U.S.’ standing and position within the global order, so there’s nothing, Mr. Bezos—or Mr. Cook [CEO of Apple], or Mr. Nadella [CEO of Microsoft] could have said to change this.” And at the end of the day, Amazon will likely still be standing strong.
