<div id="readability-page-1">President Donald Trump's &#34;Liberation Day&#34; tariff program set off a string of worries and sent the markets tumbling on Thursday and Friday. New fears about how the tariffs could trigger a recession sent investors running toward safer instruments like U.S. Treasury bills. Analysts at J.P. Morgan raised their forecast for the likelihood of a recession to 60%. The stock market lost about $3.1 trillion just on Thursday, its worst day since 2020, and the S&amp;P 500 (^GSPC -5.97%) dropped 4.8%. On Friday, the S&amp;P 500 fell even farther, dropping another 5.9% and creating a two-day total percentage loss of 10.5%. As investors work to determine which stocks are likely to get hit hardest by the tariffs (and reciprocal tariffs leveied in wheat is likely to be a trade war), some obvious candidates arise. Amazon (AMZN -3.92%) stock is one of those stocks and it dropped 12.8% since the tariffs were announced, and it's lost all its gains from the past year. Amazon is vulnerable to the tariff impact in several ways. Here are three ways the tariffs can affect Amazon and what it could mean for the company and the stock. <h2>1. Imported goods sold on Amazon are likely to get more expensive</h2> The top four U.S. import categories involve vehicles, auto parts, pharmaceuticals, and crude oil. Amazon has limited exposure to two of those categories (auto parts and pharmaceuticals). The next four categories, according to Statista, are important Amazon products: computers, cellphones, electronics, and computer accessories. Amazon is the largest U.S. e-commerce retailer, controlling around 40% of the U.S. market, and it's the second-largest U.S. company by total sales, with $638 billion in 2024 sales, trailing only Walmart. Amazon has been slowly moving over from being an exclusively product-based company to embracing a more service-based model. In the 2024 fourth quarter, product-based sales accounted for about 68% of the total, which is still substantially higher than service-based revenue. Higher tariffs on all non-U.S. manufactured products could seriously impact Amazon's sales if prices go higher and consumers cut back on spending. That's what the fear of recession is all about. Amazon is better positioned to handle this than other retailers since it's highly focused on keeping prices low. According to e-commerce analysis company Profitero, it had the lowest prices of the holiday season for the eighth year in a row, averaging about 14% lower than similar retailers. It recently launched a new project called Amazon Haul, which aggregates lower-priced items for easy shopping. However, cutbacks are cutbacks, and grocery isn't Amazon's main business. Walmart might manage better through a potential recession because it's focused on groceries, which are essentials, and it's a discount retailer. If consumers slow spending on computers, electronics, and other discretionary categories, Amazon could feel the blow. Another argument in Amazon's favor is that it plays the long game. There's always a dance for retailers between sales and profits, and Amazon could sacrifice its margins for the sake of keeping customers on its platform and keeping or enlarging its market share. Smaller retailers don't typically have that option if they want to stay alive. <h2>2. Amazon has international operations that are likely to get caught up in various trade wars</h2> The new tariffs could trigger a broader global trade war, and that could impact Amazon even more severely, because it operates internationally. Amazon services about 130 international locations, some with local delivery and fulfillment options and some with delivery from the U.S. A global trade war could create retail upheaval and upset Amazon's international operations, but again, as a solid leader in retail with other operations that can hedge against product issues, Amazon can better withstand the pressure than smaller companies. <h2>3. Amazon's stock is going to get cheaper</h2> A two-day 10.5% wipeout is a whopper for investors, but experienced long-term investors know to take such short-term volatility in stride. This isn't the first time Amazon stock has dropped, and it's always bounced back even better. As just one example, investors may have already forgotten that Amazon stock lost a full 50% of its value in 2022, and even with this week's decline, it's still more than doubled from those lows. It's not about what's happening now, it's about what makes a strong, viable company. And if you believe Amazon has an incredible business, you can see this, and whatever turmoil happens over the next few weeks, as an opportunity to buy on the dip. At the current price, Amazon stock trades at its lowest P/E ratio in more than a decade. <img src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/987f9dad548a776f5f282e4888f5c107.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="720" height="441" original-src="https://imageproxy.pbkrs.com/https://media.ycharts.com/charts/987f9dad548a776f5f282e4888f5c107.png"/> Data by YCharts. I wouldn't be surprised to hear that many billionaire investors scoop up shares of Amazon at these prices, and if you have a long time horizon, you might want to also. </div>

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The recent U.S. tariffs have raised concerns about a potential recession, leading to significant stock market losses, including a 12.8% drop in Amazon's stock. Analysts predict that higher tariffs on imported goods could increase prices for Amazon's products, impacting sales. Additionally, Amazon's international operations may be affected by a global trade war. Despite the volatility, long-term investors may view the current dip as a buying opportunity, as Amazon's stock is trading at its lowest P/E ratio in over a decade.

- President Trump's "Liberation Day" tariff program caused significant market declines, with the S&P 500 dropping 10.5% over two days, raising recession fears.  
- Amazon, facing potential price increases on imported goods and international trade war impacts, saw its stock fall 12.8%, losing all gains from the past year.  
- Despite these challenges, Amazon's focus on low prices and long-term growth strategies may help it weather the storm better than smaller retailers, presenting a potential buying opportunity for long-term investors.

3 Ways the New U.S. Tariffs Might Affect Amazon Stock