MW Tariff fears are back - and they're hitting Amazon, Walmart and other retail stocks
By Bill Peters
Amazon CEO tells CNBC that tariffs are starting to 'creep' into prices
Retail stocks slumped as tariff fears returned following President Donald Trump's latest threat against eight European countries.
Shares of retailers like Amazon.com were among the hardest hit on Tuesday after President Donald Trump escalated his push to acquire Greenland and the e-commerce giant's chief executive warned that tariffs were starting to nudge prices higher.
The consumer discretionary sector XLY was the weakest of the S&P 500 index's SPX 11 key sectors on what was gearing up to be the stock market's worst day since mid-November.
Among the biggest retail names, Amazon shares (AMZN) fell 2.2% in recent midday trading, Walmart's stock $(WMT)$ shed 1.3% and shares of Target (TGT) gave up 1.6%. Costco shares $(COST)$ bucked the trend, edging up 0.5%.
Elsewhere, Abercrombie & Fitch's stock $(ANF)$ was down 4.3% and Gap shares $(GAP)$ fell 1.8%.
Amazon CEO Andy Jassy told CNBC on Tuesday that the e-commerce giant, along with the businesses that sell their items on its site, had stocked up on products to get ahead of last year's U.S. tariffs, which function as a tax on imports. But he said they had run out of most of those stockpiled products by the fall.
"So you start to see some of the tariffs creep into some of the prices, some of the items. And you see some sellers are deciding that they're passing on those higher costs to consumers in the form of higher prices, some are deciding that they'll absorb it to drive demand, and some are doing something in between," Jassy told the news outlet at the World Economic Forum in Davos, Switzerland.
"I think you're starting to see more of that impact," he added.
Over the past year, in an effort to manage the impact of tariffs and narrow industry margins, retailers have tried to raised prices on some items without scaring away shoppers already struggling with years of inflation. They have also recalibrated things like production, costs and product design to manage the impact of tariffs.
Last year, Amazon downplayed the impact of U.S.-led trade war.
Jassy said last summer that much of what had been reported about the possible effects of tariffs on retail prices had so far has been "noise" and "wrong." During the spring, he said Amazon hadn't yet "seen any attenuation of demand," and he touted Amazon's vast network of merchants who he said could sell different items at a wide variety of prices.
Market anxieties over tariffs faded over the course of 2025. Some analysts entered 2026 feeling less cautious about the state of the consumer, based on expectations for large tax refunds and other breaks, as well as lower interest rates. Others have said that companies overall had already made the necessary adjustments to their production and shipping infrastructure to blunt the trade war's impact.
But over the weekend, Trump said he would place 10% tariffs on imports from eight European countries as he tries to pressure them to support his efforts to buy Greenland, which is a territory of Denmark.
He said those countries, which have supported Denmark's control over Greenland, would also be subject to 25% tariffs on June 1, "until such time as a deal is reached for the complete and total purchase of Greenland."
Trump has argued that Russia and China also want control of Greenland and that U.S. control of the territory would strengthen U.S. security and access to potential natural resources.
-Bill Peters
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(END) Dow Jones Newswires
January 20, 2026 12:35 ET (17:35 GMT)
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