President Donald Trump used to refer to Jeff Bezos as \u201cJeff Bozo.\u201d Now, after more drama between the two men, Trump is calling the Amazon founder a \u201cgood guy.\u201d<\/p>\n
Amazon\u2019s earnings report, scheduled for Thursday, already had investors on edge due to the president\u2019s sweeping tariffs and the potential impact they\u2019ll have across the tech giant\u2019s numerous businesses. With its stock price down 17% this year, Amazon is expected to report its slowest rate of revenue growth for any period since 2022, and that doesn\u2019t reflect the levies announced in early April.<\/p>\n
The tension got amped up early this week.<\/p>\n
The White House on Tuesday criticized Amazon for reportedly planning to display on its site how much the new tariffs on top U.S. trading partners are driving up prices for consumers. After the story was published by Punchbowl News, Trump called Bezos to complain.<\/p>\n
Amazon swiftly responded and said no such change was coming.<\/p>\n
\u201cThis was never approved and is not going to happen,\u201d Amazon wrote in a blog post that totaled 31 words.<\/p>\n
President Trump frequently hurled insults at Bezos during his firm term in the White House, largely because of the Amazon founder\u2019s ownership of the Washington Post. Bezos has recently gone out of his way to try and mend the relationship, traveling to Washington, D.C., for the inauguration in January.<\/p>\n
The president said he was pleased with their latest phone call.<\/p>\n
\u201cJeff Bezos was very nice,\u201d Trump told reporters later on Tuesday. \u201cHe was terrific. He solved the problem very quickly and he did the right thing. He\u2019s a good guy.\u201d<\/p>\n
Amazon clarified that it was only considering displaying the import fees on products sold on its discount storefront, Amazon Haul, which competes with ultra-cheap Chinese retailer Temu. Products on Haul cost $20 or less and many of them are sold direct from China using the de minimis trade exemption. That loophole is set to go away next month after Trump signed an executive order, making it more expensive to ship those products to the U.S.<\/p>\n
The clash with Trump highlights the pressure Amazon is under to blunt the impact of Trump\u2019s aggressive tariffs on Chinese imports, which total 145%. The company faces significant exposure to the tariffs, primarily through its retail unit. Amazon sources some products from China, while many sellers on its third-party marketplace rely on the world\u2019s second-largest economy to make or assemble their products.<\/p>\n
The topic of tariffs will hover over Amazon\u2019s first-quarter earnings report. Investors will want to know how higher import costs could impact its margins, and whether uncertainty around the tariffs has caused shoppers to be more cautious with their spending.<\/p>\n
For the quarter, Amazon is expected to report earnings per share of $1.37 and revenue of $155.04 billion, according to LSEG, which would represent annual growth of just over 8% and would be the slowest rate of expansion since the second quarter of 2022.<\/p>\n
Amazon CEO Andy Jassy told CNBC earlier this month that the company hasn\u2019t seen a drop-off in consumer demand. Amazon is \u201cgoing to try and do everything we can\u201d to keep prices low for shoppers, including renegotiating terms with some of its suppliers, Jassy said. But he acknowledged some third-party sellers will \u201cneed to pass that cost\u201d of tariffs on to consumers.<\/p>\n
Analysts at UBS said in a note to clients on Tuesday that at least 50% of items sold on Amazon are subject to Trump\u2019s tariffs and could become more expensive as a result.<\/p>\n
\u201cConsumers therefore might have to make more difficult choices on where to allocate their dollars,\u201d wrote the analysts, who have a buy rating on Amazon shares.<\/p>\n
Amazon has reportedly pressured some of its suppliers to cut prices to shrink the impact of Trump\u2019s tariffs, according to the Financial Times.<\/p>\n
Some sellers have already raised prices and cut back on advertising spend as they contend with higher import costs. Others are looking to secure new suppliers in countries like Vietnam, Mexico and India, where tariffs are increasing under Trump, but are mild compared with the levies imposed on goods from China.<\/p>\n
Temu and rival discount app Shein implemented price hikes on many items last week. Temu has since added \u201cimport charges\u201d ranging between 130% and 150% on some products.<\/p>\n
Wall Street will likely be focused on Amazon\u2019s commentary surrounding business conditions going forward. The third quarter will include the results of Amazon\u2019s Prime Day shopping event, typically held in July across two days. Amazon sellers previously told CNBC they may run fewer deals for this year\u2019s Prime Day to conserve inventory or because they can\u2019t afford to mark down products any further.<\/p>\n
Bank of America analysts said in a note to clients this week that it sees the potential for Amazon to give a \u201cwider guidance range\u201d in its earnings report on Thursday, \u201cthough the impact may be bigger in the third quarter.\u201d<\/p>\n
Analysts at Oppenheimer said investors are \u201chighly uncertain\u201d as to the impact of tariffs on Amazon\u2019s e-commerce business. The firm has an outperform rating on Amazon\u2019s stock.<\/p>\n
\u201cWe are assuming Q3 is the quarter most impacted as sellers should still have pre-tariff inventory through May and therefore don\u2019t need to raise prices yet,\u201d the analysts wrote.<\/p>\n
Amazon didn\u2019t provide a comment beyond its short statement on Tuesday.<\/p>\n<\/p>\n
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President Donald Trump used to refer to Jeff Bezos as \u201cJeff Bozo.\u201d Now, after more drama between the two men, Trump is calling the Amazon founder a \u201cgood guy.\u201d Amazon\u2019s earnings report, scheduled for Thursday, already had investors on edge due to the president\u2019s sweeping tariffs and the potential impact they\u2019ll have across the tech giant\u2019s numerous businesses. With its…<\/p>\n","protected":false},"author":1,"featured_media":421,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-420","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts\/420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/comments?post=420"}],"version-history":[{"count":0,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/posts\/420\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/media\/421"}],"wp:attachment":[{"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/media?parent=420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/categories?post=420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thetradingdictionary.com\/index.php\/wp-json\/wp\/v2\/tags?post=420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}