Amazon's Tariff Twist: Jeff Bezos Still Set To Win Despite Market Dip

2 days ago

Here’s why Amazon is positioned well to withstand the tariff blows.

Read the full story on Forbes: https://www.forbes.com/sites/phoebeliu/2025/04/04/despite-share-slide-billionaire-jeff-bezos-and-amazon-look-likely-trump-tariff-winners/

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Transcript

00:00Today on Forbes, despite ShareSlide, Jeff Bezos and Amazon look likely to end up tariff winners.

00:10The world's richest retail boss, Amazon's founder and chairman Jeff Bezos,

00:15has been carefully tending to his relationship with President Donald Trump. Since the election,

00:20Bezos has cozied up to him, congratulating him publicly on X and attending his inauguration,

00:26to which Amazon donated. At least publicly, he's also been careful with what he's said about tariffs.

00:33In the next post in March, Bezos wrote that his Washington Post's opinion pages

00:38could cover the quote, damaging and distorting effects if tariffs are used to pick winners and

00:43losers. Late last Wednesday, Trump announced a flat 10% tariff, plus higher rates for many of

00:50America's largest trading partners, including 34% on China. On Friday, China hit back with a matching

00:5834% tariff, which, when combined with its existing tariffs, brings the total to 54%.

01:05The trade war continued Monday, with Trump threatening more tariffs on China to possibly

01:10begin this week, which would bring the total taxes on Chinese imports to 104%.

01:16Against the backdrop of the biggest two-day stock market drop last Thursday and Friday

01:20since 2022, Amazon sure looks like a loser. The world's largest online retailer is heavily

01:27reliant on goods manufactured in China. Shares slid 9% on Thursday, April 3rd,

01:33versus the Nasdaq's 6%, wiping $16 billion from the net worth of the world's second richest person.

01:40Shares slipped again on Friday, but on Monday, they ticked back up slightly.

01:45It's clear that tariffs will increase the cost of imported goods, particularly those sourced

01:50from China, according to Helena Wang, analyst at Phillips Securities. Gil Luria, analyst at D.A.

01:57Davidson, says, quote, This isn't good for anybody, and it's not good for Amazon.

02:04The hardest-hit products would be electronics, apparel, and household goods, where Amazon relies

02:09heavily on Chinese manufacturing, according to Phillips Securities Wang and Jeffrey Wolodrzak,

02:15of Pivotal Research Group. Apparel, which comprises an estimated 10-15% of Amazon's retail revenue,

02:22may be especially impacted, says Luria and Wolodrzak. While Amazon doesn't disclose the

02:27percentage of products sourced from outside the U.S., the analysts that spoke with Forbes estimated that

02:33anywhere from 40% to 70% of Amazon's products are sourced from outside of the U.S., with most of that

02:40coming from China. But there's a silver lining. Forbes spoke with four analysts, three of whom

02:46said the tariffs, if they last, could put Amazon at a competitive advantage. Nicholas Jones, an equity

02:54research analyst at Citizens Capital Markets and Advisory, says, quote, This is not an Amazon-targeted

03:00tariff. This is global, which means everyone else is going to be facing the exact same pressure as Amazon

03:06is. Your costs may go up, but you're likely still to go to Amazon because they'll deliver it tomorrow,

03:12right? Amazon has the advantage of convenience. Plus, Amazon is in the enviable position of having

03:19options for how it responds. Lurie explains that there are three so-called levers at play.

03:26Amazon could increase prices that consumers pay, push down already low margins on its suppliers,

03:32or absorb the increase itself, leading to its own lower margins. Amazon had a 9% profit margin in 2024.

03:41Luria thinks Amazon will mostly rely on the former two, but says, quote,

03:45If Amazon feels like these tariffs may not either come to fruition or stay in effect for very long,

03:51it might temporarily choose to take the hit on margins in some categories. But the longer the

03:56tariffs stay in effect, sellers and consumers are likely to bear the burden. A spokesperson for

04:03Amazon didn't return a request for comment before this story was first published. Over time,

04:08as consumers and sellers absorb more of the associated costs, Amazon could come out on top.

04:14Jones, the analyst from Citizens Capital Markets and Advisory, says, quote,

04:19Just because it's expensive on Amazon doesn't mean it's going to be cheaper at Walmart,

04:23Target, Best Buy or anywhere else. These things are coming from the same places.

04:29For full coverage, check out Phoebe Lou's piece on Forbes.com.

04:35This is Kieran Meadows from Forbes. Thanks for tuning in.

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Amazon's Tariff Twist: Jeff Bezos Still Set To Win Despite Market Dip

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