Trump's tariffs could hurt Temu and Shein. Here's which stocks stand to gain.

MW Trump's tariffs could hurt Temu and Shein. Here's which stocks stand to gain.

By Emily Bary

Amazon and Etsy could benefit from an end to the 'de minimis' exemption that lets companies directly ship packages worth under $800 without paying duties

President Trump's latest tariff plans could have a sweeping impact across the e-commerce and internet sectors as it gets harder for companies to import cheap Chinese goods.

The new rules would end the "de minimis" exemption, which allows small shipments valued at less than $800 to enter the U.S. without being subject to tariffs. With that exemption set to be eliminated, companies such as Shein and PDD Holdings Inc.'s $(PDD)$ Temu could have a more difficult time operating their business models in the U.S.

Who stands to benefit? One possible winner is Etsy Inc. $(ETSY)$, which sells homemade items, among other things. The company has been up against cheaper overseas competition, but its shares are up 4.4% in premarket trading Monday, suggesting investors see an easier path forward.

Youssef Squali of Truist Securities noted that Etsy could also benefit if advertising prices go down thanks to a less fervent U.S. push by Shein and Temu.

Read: Here are all the ways Trump's tariffs could hit stocks, according to Goldman Sachs

Amazon.com Inc. $(AMZN)$ is in an interesting position as well. Through the "de minimis" exemption, companies would ship packages to customers directly from China to get around tax rules. While Amazon offered some of that as well through a new service called Haul, it's likely not a meaningful portion of Amazon's business. That suggests Amazon stands to gain if its Chinese competitors reduce their presence in the U.S. market or have to hike the prices of the goods they sell, according to Squali.

He advised investors to watch internet names such as Meta Platforms Inc. $(META)$ and Alphabet Inc. $(GOOG)$ $(GOOGL)$, which have cashed on the rise of Shein and Temu by taking in advertising money. "Depending on how Temu and Shein decide to respond to the elimination of the de minimis exemption, we could see their ad spend on Meta being curtailed, in our view," he wrote. The same could hold for Google.

Looking more broadly beyond the de minimis exception, Bernstein's Nikhil Devnani noted that Trump's new tariffs could be painful for Wayfair Inc. (W) given that "China-sourced merchandise" might account for 30% to 40% of goods on the online furniture retailer's platform.

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If the tariffs go into effect Tuesday, Wayfair would have to choose whether to take a smaller markup, hurting its margins, or pass on higher costs to consumers. He thinks the company would probably opt for the latter.

"We saw this last time around with the 2019 Trump tariffs on China," Devnani wrote. "We think Wayfair will do the same, with consumers bearing the cost." That would make Wayfair less price competitive, however, when consumers were already cautious about furniture spending.

-Emily Bary

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February 03, 2025 09:19 ET (14:19 GMT)

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