From Yahoo Finance: 2025-04-19 16:00:00

President Trump’s new tariff policy, targeting all countries, has investors concerned. While currently paused for negotiations, there’s a fixed 10% minimum tariff in place. Merchants face increased costs, affecting their businesses. Shopify’s prospects may suffer, leading to potential long-term pain for merchants and the company.

The tariff policy poses a significant threat to merchants, increasing the cost of goods sold and forcing tough decisions. Beyond pricing pressure, merchants relying on Chinese supplies face a steep 145% tariff increase, potentially rendering their business models unworkable. The new tariffs introduce complexity and uncertainty, impacting sales volume and profitability.

Shopify, as an e-commerce SaaS provider, may not face direct financial impacts from the tariffs. While part of its revenue is recurring, the bulk depends on gross merchandise value (GMV), which could be affected by lower sales volume due to increased product costs. A long-term tariff war could hinder Shopify’s growth globally.

In the short term, Shopify may experience pressure on revenue and GMV due to the tariffs. Investors should monitor signs of merchant churn and the company’s ability to navigate the changing trade environment. While Shopify can still grow, the path forward has become more complex, potentially impacting revenue and growth prospects.

Considerations before buying Shopify stock include the potential impact of the tariffs on the company’s revenue and growth. Despite the challenges, opportunities may arise for Shopify to offer new tools and technologies to assist merchants in navigating the changing trade environment. Investors should stay informed and watch for developments closely.

Read more: What Investors Should Know About the Impact of Tariffs on Shopify’s Business