ETSY Stock Plummets Amid Looming Tariff Policy Shift

Etsy shares tumbled 8% Monday as investors priced in the potential fallout from a U.S. policy change targeting the 'de minimis' tariff exemption. The rule, which allows duty-free imports under $800, has been crucial for Etsy's cross-border marketplace connecting U.S. buyers with international artisans.

Termination of this exemption could disrupt Etsy's cost structure and global supply chain. Buyers may face higher prices while sellers absorb increased logistics costs - a double-edged sword threatening both demand and margins for the handmade goods platform.

The selloff contrasts with recent analyst optimism. Truist Financial upgraded Etsy's price target to $75 last week, citing stronger-than-expected marketplace revenue based on credit card data. This divergence highlights the market's hypersensitivity to regulatory risks in e-commerce.