Q: No one knows what Trump will finally do with tariffs. Assuming he goes ahead with some, what impact might it have on SHOP? Can you provide assessments on differing levels of tariffs?
5i Research Answer:
As a service provider, SHOP is not likely to be directly impacted by tariffs. But its merchants may certainly be. Here are some comments the CEO made last year on the situation. Merchants do have alternative suppliers, but in general prices will likely rise, which could certainly impact SHOP's total volume (GMV) if consumers back off because of inflation. The potential 60% tariff on China would of course be harsh for merchants, but they can second-source supply if needed.