Trump Tariffs Test Amazon, But Goldman Says E-Commerce Giant Can Roll With It

Amazon.com, Inc. (NASDAQ:AMZN) shares have been down more than 10% since President Donald Trump revealed a tougher-than-expected tariff plan.

According to Goldman Sachs, the Seattle-based e-commerce company could mitigate the impact of these tariffs in several ways.

In a note to investors, the bank’s analysts, led by Eric Sheridan, said there are a wide range of possible scenarios, but several that would result in a $5 billion to $10 billion impact on Amazon's EBIT resulting from a 15% to 20% increase in its cost of goods sold.  

However, Amazon can negotiate with vendors, raise prices on certain items and shift its vendor base and/or product mix toward items with lower import fees, Sheridan said.

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Additionally, Amazon will likely benefit from reduced competition from Chinese e-commerce peers like Shein and Temu when the de minimis exemption loophole is closed on May 2. The de minimis exemption allows shipments from China and Hong Kong valued at $800 or less to enter the U.S. tariff-free. 

Beginning May 2, the shipments will be subject to a charge — either 30% of their value or $25 per item. The rate is increasing to $50 per item starting June 1. 

Goldman Sachs pointed to a historical case study it conducted using its own estimates. It shows Amazon’s worldwide merchandise margin remained stable in 2018 and 2019. That was during the first series of tariffs from Trump's inaugural term. 

"We believe that it is an important reference point for investors in thinking through how mitigating factors can help cushion the net impact of input cost increases on the company's P&L (across any combination of mix shifts, price increases and vendor negotiations)," the analysts wrote. 

Goldman Sachs maintained Amazon shares with a Buy rating and a $255 price target. 

Price Action: According to Benzinga Pro, Amazon stock was up 2.12% at $174.63 per share heading into Monday’s closing bell.

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