ETSY Stock Crashes 8% as ’De Minimis’ Tax Exemption Faces Imminent Demise

Etsy investors just got a brutal lesson in regulatory risk—and it's costing them millions.

The handmade marketplace giant plunged 8% in today's session as Washington's beloved 'de minimis' exemption nears expiration. That loophole—which lets imported goods under $800 slip through customs tax-free—has been Etsy's not-so-secret weapon for years.

Wall Street's favorite craft fair is about to get a whole lot more expensive.

No more free rides. Sellers relying on cheap international shipping now face a stark choice: absorb new tariffs or pass costs to consumers already stretched thin. Either way, margins get squeezed—hard.

Because nothing says 'free market' like Congress deciding which business models survive another quarter. Etsy's dive proves yet again: when regulators blink, portfolios bleed.

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This exemption has long supported platforms like Etsy, which connect millions of U.S. buyers with independent sellers overseas. Without it, buyers may face higher prices, and sellers could see increased costs, potentially hurting demand and margins. Etsy’s business model, which depends on cross-border transactions, is vulnerable to such changes.

Thus, the upcoming change in policy has raised concerns over Etsy’s future sales and the impact on its financial position.

Truist Analyst Raised ETSY Stock Target to $75

Last week, Truist Financial analyst Youssef Squali raised the price target for Etsy stock to $75 from $70 with a Buy rating.

The analyst noted that Etsy’s marketplace revenue so far this quarter looks better-than-expected, based on credit card spending data. He also expects comparisons to get easier in the coming months, which could help Etsy show stronger growth by the end of the year.

Overall, Squali believes Etsy is gaining momentum, thanks to efforts to improve product quality and other growth initiatives.

Is Etsy a Buy or Sell?

Turning to Wall Street, ETSY stock has a Moderate Buy consensus rating based on eight Buys, 13 Holds, and one Sell assigned in the last three months. At $64.57, the average Etsy stock price target implies a 12.55% upside potential.