E-commerce shares rose Friday after the Supreme Court ruled that President Donald Trump lacked authority to impose tariffs under the International Economic Powers Act, a decision that lifted stocks across online retail platforms exposed to the levies.
Court Ruling And Market Reaction
In a 6-3 decision, the court said the IEEPA does not grant the president legal authority to impose tariffs and noted that the statute does not explicitly mention tariffs. The ruling removed a legal foundation used to enact many of the duties.
Markets reacted quickly. Amazon and Wayfair shares each rose 2%. Etsy climbed 8%. Shopify added 1% and eBay rose 3%. Pinduoduo Holdings, the parent company of Temu, gained 2%.
Trump’s tariff policy had disrupted companies that operate marketplaces for online sellers. In several cases, the duties compressed margins and led businesses to cut staff, raise prices, or change supply chains.
Tariffs And The De Minimis Change
Trump also used the IEEPA when he announced the end of the de minimis exemption, a rule that allowed low-value packages to enter the United States without duties. The change affected many small sellers on Etsy, eBay, and Shopify who relied on the exemption to support their businesses. The shift also threatened the U.S. operations of Temu and Shein, which had used the rule to ship packages from China without duties. Temu briefly halted direct shipments from China, and both companies later expanded U.S.-based seller networks and logistics operations.
The end of de minimis, along with other tariff changes and a weaker economic backdrop, weighed on consumer sentiment. Amazon Chief Executive Andy Jassy said in an interview with CNBC last month that tariffs had begun to appear in some prices. He said Amazon has seen some shoppers move toward lower-priced items and bargains, while others show more caution around higher-priced discretionary purchases.
Company Filings And Business Conditions
Etsy said in its annual report released Thursday that its business has faced pressure from reduced discretionary spending and changing buyer behavior. “There is considerable uncertainty regarding the evolving tariff landscape, how recent changes to de minimis exemptions may play out, and the impact higher tariffs might have on consumer demand and discretionary wallet share,” the company wrote in its 10-K filing.
The company, which hosts many small businesses and artisan sellers, also issued muted guidance for first-quarter gross merchandise sales. Chief Financial Officer Lanny Baker said Etsy’s forecast assumes macroeconomic conditions remain stable compared with current levels.
Representatives from Etsy and Amazon did not immediately respond to requests for comment on the Supreme Court ruling.
Industry Response And Financial Exposure
The National Retail Federation said in a statement that the ruling provides “much-needed certainty for U.S. businesses and manufacturers, enabling global supply chains to operate without ambiguity.”
Companies may now seek to recover tariff costs, with some already filing lawsuits ahead of the decision. Apple has paid about $3.3 billion in tariffs to date.
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