To The Moon

Eight months into his 2nd term, Trump proved to be the radical agent everyone remembers him to be during his 1st term but more this time round…

He has successfully disrupted not just the world supply chain but also the global trading flow.

De Minimis Exemption.

His latest endeavour - the removal of “de minimis exemption” effected on 29 Aug 2025, has set off another chain reaction that I think will affected US listed stocks that are basically (a) online and (b) have an international presence.

By this, I refer to US listed stocks like :

• $Amazon.com(AMZN)$.

• $Shopify(SHOP)$.

• $eBay(EBAY)$.

• $Etsy(ETSY)$.

• $PayPal(PYPL)$

So far, most postal services around the world have halted sending parcels to the US for fear of unimaginable repercussions. (see below)

Holding back is the safest bet for now as the US postal services will have to work out how they are going to help the government implement this ill thought out policy.

Does it mean the longer it takes to sort out all the possible kinks with the demise of “de minimis exemption”, the more abovementioned stocks will be affected ?

Business Model Impact

• eBay and other marketplaces relied on duty-free trade for items under $800, facilitating buyers to access vast international offerings at low cost.

• With new tariffs and customs requirements, buyers now face unexpected charges and fewer product choices, leading some sellers to pause or rethink US sales.

• Most affected are platforms with strong international third-party seller volume such as eBay, Etsy, Amazon and Shopify.

US Stocks Reaction.

Just last week alone, all 3 stocks experienced varying falls. (see below)

• eBay’s shares dropped by about -4.86% over the last 5 days.

• Etsy saw a sharper -6.33% decline over the same past 5 days.

• While Shopify fell the least at -1.24% over the past 5 days.

• When Amazon closed on Fri, 29 Aug 2025, it gained a marginal +0.68% for the week.

• As of Wed, 03 Sep 2025, its in the red too, falling -1.17% over past 5 days. (see below)

Concerns.

(1) Short term.

• Short-term volatility is expected.

• Analysts referencing historical shocks in trade policy resulting, predicts a negative 5–10% swings for e-commerce stocks.

• Investors should be concerned and watch out for (a) shrinking margins and (b) reduced consumer demand due to higher prices and logistics strain.

(2) Longer-Term.

• Some adaptation is possible; strategic shifts to US domestic sales, new pricing, and streamlined logistics could mitigate losses.

• Note : the above is a text-book answer because a weak US economy cannot possibility match global consumption.

• Profit pressure from tariffs and compliance may linger, affecting near- to mid-term valuations, especially for companies most exposed to global cross-border transactions.

Spill-over Fallout Stock.

At first glance, it looks as if Paypal will not be affected by the small parcel ruling.

After all, it is a multinational financial technology (fintech) company that specializes in (1) digital payments and (2) online money transfers for individuals and businesses.

However, if one digs deeper, one will find that:

• A substantial portion of its business flows from online portals like AMZN, SHOP, ETSY and EBAY.

• Digital commerce constitutes the bulk of PYPL’s transaction volume and revenue.

• Over 65% of PYPL’s global payment volume comes from retail & e-commerce, covering marketplaces, direct merchants, and small businesses.

• Major online portals (Shopify, Etsy, eBay, partial Amazon) are estimated to generate 15–25% of PYPL’s transaction volume, a meaningful and not really a dominant share.

• PYPL’s exposure though is diversified across (i) millions of merchants, (ii) a vast peer-to-peer (P2P) network, and (iii) its own branded checkout and (iv) Venmo.

• No single marketplace dominates its business mix, that is a ‘blessing’, especially during times like this.

Impact on PYPL.

My focus is on impact to PYPL in the near term.

There is no need to plan or look too far ahead, when it come to fluid Trump.

Near Term (2025–2026)

• PayPal saw a decrease in transactions (-7% YoY in Q1 2025), likely linked to weaker global e-commerce activity, including from affected marketplaces.

• The loss of the “de minimis exemption” is causing higher tariffs and border friction, especially for eBay, Etsy, and Shopify’s cross-border sales.

• This may lead to softer merchandise volumes running through PYPL.

• Despite Q2 profit growth, concerns over trade barriers and discretionary spending have already pressured PayPal’s shares to fall by -19.19% YTD, as of 03 Sep 2025. (see above)

Key Considerations.

With a rather gloomy outlook for AMZN, SHOP, EBAY, ETSY & PYPL, it is important :

• Brace for continued volatility and weaker short-term profits.

• Hasty exit may lock in losses after the initial market reaction.

• “Wait to see” company’s response strategy is equally risky.

The most logical move is to sell now and take profit. Waiting until Q3 results show a loss instead of profit will be too late to act. Agree ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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• US on brink of Recession? Read Jobs Reports ! Wed, 03 September. Pick post.

• NIO, Chinese EV makers' 2025 comeback kid ? Tue, 02 September. Pick post.

• Key Facts Before This Week’s Jobs Report ! Mon, 01 September. Pick post.

• Do you think Trump will do a U-turn and reinstate the “de minimis” exemption’?

• Do you think online portals like SHOP, ETSY, EBAY & PYPL will turn in a poor Q3 earnings ?

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