What Happened?
Shares of online marketplace Etsy (NASDAQ: ETSY) fell 3.5% in the afternoon session after extending a sell-off from the previous day as an executive order was signed to eliminate a key U.S. import tax exemption.
The stock dropped over 8% on Monday and continued its decline as investors react to the end of the "de minimis" exemption, which allowed goods valued under $800 to be imported into the U.S. without taxes or tariffs. The change, set to take effect this Friday, is expected to negatively impact the online marketplace, as many of its sellers offer small, relatively inexpensive items that will now be subject to these duties, potentially making them prohibitively pricey. In response, Etsy has already suspended U.S. shipping label services for several international carriers, including Canada Post and the UK's Royal Mail. This regulatory headwind adds to existing concerns following the company's recent quarterly earnings, where it missed consensus estimates for earnings per share.
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What Is The Market Telling Us
Etsy’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 5.3% on the news that reports that a U.S. tariff exemption for many small online purchases is set to end.
The exemption, known as 'de minimis,' has allowed many goods from international sellers to be shipped to U.S. consumers without facing import duties. According to reports, the end of this provision is expected to directly affect online marketplaces that connect U.S. consumers with businesses worldwide, with Etsy being specifically mentioned. This policy change could lead to higher prices for buyers or increased costs for sellers on the platform, creating uncertainty for Etsy's business model and potentially impacting future sales volumes.
Etsy is up 5.3% since the beginning of the year, but at $55.93 per share, it is still trading 20.2% below its 52-week high of $70.09 from August 2025. Investors who bought $1,000 worth of Etsy’s shares 5 years ago would now be looking at an investment worth $440.67.
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