For months, many people throughout the United States and beyond have been considering a pressing question with no clear answer: how much will the trade war impact my finances?
Since President Donald Trump quickly made good on his promise to levy tariffs against Mexico, Canada, and China, the U.S. has been locked in a vicious tit-for-tat cycle in which the world’s two largest economies circle each other, while consumers can only watch and wait.
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With Trump’s tariffs driving up the cost of almost everything, from cars to consumer electronics to groceries, it’s easy to be concerned about just how high they can go. Additionally, the uncertainty sparked by these policies is creating significant volatility for financial markets.
Many industry-leading companies such as Tesla, Nvidia, and Amazon have struggled recently, grappling with the impact of Trump’s tariffs. But two surprising companies have indicated that they aren’t worried about the trade war’s effects.
Two surprising e-commerce companies have indicated that they aren’t worried about the impact of the trade war.
Image source: Picture alliance/Getty Images
An unexpected market may be well-positioned to ride out the trade war
While consumers anxiously wait to learn which products will continue getting more expensive, investors are trying to identify the stocks best-positioned to withstand the trade war. With many high-growth stocks already being dragged down, questions abound as to the best hedges for this complicated market.
Related: Amazon walks back drastic decision on tariff prices
Thankfully, last week’s events may have provided some insight into this topic. But eBay (EBAY)  and Etsy (ETSY)  reported earnings for Q1 and took the opportunity to address the tariffs on their company’s calls, making it clear that they aren’t worried.
These companies are considered the leaders in the secondhand and handmade goods sections of the broad e-commerce industry. While these areas may seem niche, that may be exactly what helps them outperform their peers who deal primarily in inexpensive goods mass-produced in nations like China.
During their earnings calls, both companies’ leaders made it clear that while the current tariff-driven conditions are not ideal, they see their firms as being well-positioned to withstand them, primarily due to limited exposure to Chinese sellers.
EBay CEO Jamie Iannoni provided additional context. He said his company’s China to U.S. quarter accounts for 5% of its Gross Merchandise Value (GMV), the total value of goods sold on a customer-to-customer (C2C) platform, which is the kind eBay primarily uses.
“Our business is not immune to increased costs from tariffs and friction, but we remain confident in our ability to support our community,” he states.
Lanny Baker, chief financial officer of Etsy, espoused a similar sentiment, highlighting limited exposure to China on his company’s part.
“At present, Etsy’s direct tariff exposure appears to be relatively low, given that just over 1% of GMS comes from U.S. imports of items purchased from sellers in China,” he notes. “And our sellers tell us they primarily source their supply locally.”
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Baker adds that the bulk of Etsy’s Gross Merchandise Sales (GMS), the dollar value of everything sold in its marketplaces, can be attributed to locally sourced commerce from the seller’s country. “We saw the benefit of this advantage during the pandemic and supply chain bottlenecks that impacted international trade a few years ago,” he recalls.
The trade war may be won by small companies, not big ones
In this, we are reminded of an important economic phenomenon sometimes overlooked when assessing hedges against the trade war. Sellers on Etsy, which caters primarily to independent merchants selling either handmade or secondhand goods, are hardly reliant on China, if at all.
Related: Apple CEO sends blunt message on tariffs impact
This means that even if conditions continue to tighten and trade relations are strained, companies like eBay and Etsy will indeed have less risk. Their sellers will have an easier time continuing operations, and they won’t have to increase prices by much.
“Having sellers with local sourcing strategies can provide a significant advantage over competitors like Temu, Shein, and Amazon,” reports TechCrunch. “However, secondhand companies still have to deal with the challenges that come with the ongoing economic uncertainty and consumer spending habits.”
It’s true that both companies also acknowledged they are not immune to the impact of Trump’s tariffs.Â
But no one is, especially in the e-commerce space. And all things considered, secondhand and handmade gift sellers seem to be in a much better position than companies that depend on China for a significant portion of their merchandise.Â
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