The newly unveiled “Liberation Day” tariffs are sending shockwaves through the U.S. internet and technology sectors, with analysts at Baird Equity Research warning of sweeping consequences for nearly every corner of the digital economy.

From ecommerce and online advertising to cloud infrastructure and supply chains, the impacts of these “Liberation Day” tariffs are expected to be both immediate and far-reaching. President Donald Trump called April 2 “Liberation Day,” describing it as the U.S.’ “declaration of economic independence;” in a speech, he unveiled a 10% baseline tariffs on imports from from nearly all countries, plus additional country-specific tariffs.

In a research report published Wednesday night, Baird analysts outlined the potential fallout from the Trump administration’s surprise announcement, which includes new tariffs on a wide range of imported goods and a proposed closure of the “de minimis loophole” that has long allowed low-value shipments to enter the U.S. duty-free. 

“We wish this was another note about AI or generative technologies,” wrote Baird senior analyst Colin Sebastian. “But if these tariffs aren’t part of a short-term negotiating strategy, then investors should brace for earnings cuts across the sector.” 

‘Liberation Day’ tariffs create negative effect on ecommerce

According to Baird, companies most at risk include Wayfair, Shopify, Amazon and PayPal, which depend heavily on cross-border commerce and global sourcing. The firm highlighted that Amazon faces a “multi-pronged hit” — not only from higher import costs and reduced dot-com volumes, but also from increased infrastructure and enterprise tech expenses. In contrast, platforms like Instacart and eBay may be more insulated due to their domestic orientation or focus on value and secondhand goods. 

Still, no part of the online ecosystem will be untouched. 

“Nothing in our coverage is spared,” Sebastian noted. “Whether you’re a fast-fashion merchant, a cloud provider, or a social media platform, these tariffs will ripple through your cost structure, your consumer base, and your operating assumptions.” 

One of the most disruptive proposals is the closing of the de minimis provision, which has allowed foreign merchants to ship goods valued under $800 into the U.S. without paying duties. This loophole has enabled platforms like Shein and Temu to flood the American market with low-cost goods — often shipped directly to consumers from overseas.

According to tax-compliance software provider Avalara, over 1 billion such packages enter the U.S. annually. That representing an estimated $55 billion in merchandise — or roughly 5% of total U.S. ecommerce volume. 

“This is a major structural shift,” Sebastian said. “The advantage of low-cost imports is a key pillar of DTC and fast-fashion business models. Without it, pricing, margins, and consumer demand are all in flux.” 

Where companies will cut costs to combat tariffs

Baird also cited informal conversations with merchants and brands at Shoptalk’s 2025 conference, where sentiment was nearly unanimous: Tariffs will result in higher prices for consumers, and companies will have no choice but to share the pain by cutting costs elsewhere — notably in advertising and headcount. 

Digital advertising platforms are especially vulnerable, with Reddit and Pinterest flagged as among the most exposed secondary players. Even industry giants like Meta and Google will not escape unscathed, given their deep reliance on ad spend from retailers and marketplaces. Analysts also pointed to potential cost pressures on cloud services and infrastructure spending as a second-order effect. 

Supply chain uncertainty is another growing concern. Companies are already adjusting Q4 orders amid unclear consumer demand and rising costs.

“We’ve already spoken with one brand that is cutting inventory planning for the holiday season,” Sebastian said. 

Tariff effect ‘isn’t temporary’

While marketplace models may offer some resilience — by enabling shifts in product sourcing and favoring domestic inventory — the overall tone of the report was cautious and even somber. Baird described this as a “reset moment” for digital commerce. It likened the ripple effects to pandemic-era supply chain disruptions, but without the same level of stimulus or consumer tailwind to soften the blow. 

“Unlike past shocks, this one isn’t temporary,” Sebastian said. “The uncertainty around demand, the rising cost base, and the geopolitical undertones all point to longer-term structural challenges.” 

The report did note a few pockets of relative safety. Video game software companies like EA and Take-Two are less exposed, though their hardware dependencies — mostly manufactured overseas — could drive higher prices or slower refresh cycles for consoles and accessories. The report also mentioned Yelp as being less affected due to its domestic, SMB-focused business model. 

Ultimately, Baird warned that if the Trump administration implements tariffs as proposed — and doesn’t walk them back as part of a broader negotiation strategy — investors should expect downward revisions in earnings estimates across the board. 

“In a best-case scenario, this is a bargaining chip,” Sebastian said. “In a worst-case scenario, it rewrites the playbook for the entire sector.” 

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