I like Amazon (AMZN +3.47%). I'm a shareholder of the e-commerce and cloud services giant. My family orders from Amazon regularly. We use Alexa-powered Echo devices. I read books on my Kindle every day.
I also think pretty highly of Mark Cuban. His business success speaks for itself. He's entertaining on ABC's Shark Tank (and I'm sorry to see him leave the show). I also view him as a straight-shooter with whom I agree on quite a few issues.
With this in mind, Cuban's recent prediction of tariffs trouble for Amazon especially grabbed my attention. Should Amazon investors (including yours truly) be concerned?
NASDAQ: AMZN
Key Data Points
Why Cuban thinks tariffs will hurt Amazon
Cuban doesn't seem to be a big fan of Amazon. He tweeted earlier this year that he views any dependency on Amazon in a negative light when he evaluates companies in which he's considering investing. The multibillionaire has been critical of the fees that Amazon charges to sellers who use its e-commerce platform.
Amazon is also a competitor to Cuban's Cost Plus Drugs online pharmacy. Both Amazon Pharmacy's RxPass and Cost Plus Drugs seek to lower drug costs for consumers.
However, I don't think either factor plays into why Cuban thinks the Trump administration's tariffs will hurt Amazon. He provided a pretty good explanation of his perspective in a recent post on the social media platform Bluesky:
If these tariffs stick, it's going to be ugly for Amazon , but incredible for all the American sellers
-- Mark Cuban (@mcuban.bsky.social) April 5, 2025 at 8:43 PM
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Cuban's Bluesky comments were made about another post featuring Amazon U.S. Marketplace data using SmartScout, a software tool for analyzing Amazon data. The percentages of products sold in the U.S. on Amazon from Chinese resellers are striking. Notably, the data doesn't include products imported from China that are sold on Amazon by resellers not based in China. All of this matters because the White House has levied staggering tariffs of 145% on Chinese imports.
Playing devil's advocate
At least at first glance, Cuban seems to be right that "it's going to be ugly for Amazon" because of President Trump's tariffs on China. But allow me to play devil's advocate a little here.
By my rough calculations based on the SmartScout chart reposted by Cuban, Chinese resellers account for in the ballpark of $150 billion of Amazon's U.S. marketplace. But we shouldn't assume that Amazon will experience a negative financial impact anywhere close to that amount.
For one thing, consumers could buy many of the products previously bought from Chinese resellers from resellers in other countries that have much lower tariff rates. Cuban even expressed his opinion that American sellers could especially benefit from the Chinese resellers' woes. While this would only be true if the American sellers sold products made in the U.S. (or at least outside China), his argument could have merit.
On a related note, the negative impact of lower sales by Chinese resellers (and lower fees for Amazon) could be offset to some extent by increased purchases on other fronts. Importantly, Amazon now has its Amazon Haul storefront offering low costs for consumers. It was also named by Profitero as the lowest-cost U.S. online retailer for the eighth year in a row. If American consumers pinch their pennies more, many of them could do it on Amazon.
Finally, Cuban included a critical caveat in his prediction that Amazon would face trouble: "If these tariffs stick." However, President Trump said last week that the Chinese tariffs will "come down substantially" and "won't be anywhere near" the current high levels.
What should investors do if Cuban is right?
Let's assume, though, that the steep tariffs remain in place and Cuban is right that Amazon will suffer. What should investors do? I think the correct answer is to buy Amazon stock at regular intervals and hold it for the long term.
You can bet the farm that Amazon will do everything within its power to minimize the impact of tariffs on its bottom line. Remember, too, that the Trump administration's tariffs almost certainly won't be in effect forever.
Maybe the federal courts will declare them unconstitutional; 12 states and several organizations representing businesses have filed lawsuits already. Perhaps the White House will strike trade deals that reduce the tariffs to much less worrisome levels.
If nothing else, Americans could elect a new president in 2028 who reverses course. Perhaps a certain maverick billionaire who has been highly critical of the Trump administration's steep tariffs will even throw his hat in the ring. It wouldn't be the first time a reality TV show personality moved into the Oval Office.
