Amazon was smart to set the record straight to avoid the unwanted ire of the Trump administration. The news Amazon said Tuesday that displaying tariff surcharge pricing on products was “never approved” and “not going to happen.” The statement came after White House Press Secretary Karoline Leavitt blasted Amazon over a report that such a move was under consideration. “This is a hostile and political act by Amazon,” Leavitt said at a morning news conference. NBC News also reported that President Donald Trump called Amazon founder Jeff Bezos personally to complain about the initial report. Club stock Amazon, which was down more than 2% earlier, moved off session lows following the company clarifying its position. All of this unfolded as some Amazon sellers have called the tariffs “unsustainable” and have raised prices on hundreds of best-selling items as a hedge against the import costs stemming from Trump’s tariffs. China-based online retailer Temu — which has spent a fortune in recent years to get a foothold in the U.S. market — has started to charge additional import fees and display them at checkout. For its part, Walmart confirmed to Jim Cramer that although the U.S. retailer won’t be itemizing, it too will have tariff-related price hikes. Big picture With Bezos and other tech billionaires cozying up to Trump since he won the presidential election, none of them want to risk even the perception of disagreeing with the White House. Back in December, Bezos said at The New York Times’ DealBook Summit that he was optimistic about Trump’s second term. “He seems to have a lot of energy around reducing regulation. If I can help do that, I’m going to help him,” Bezos said. After Trump’s inauguration, Bezos also imposed new rules for the Washington Post’s opinion pages. The move led to accusations that Bezos was trying to curry favor with the new administration. Bottom Line While acknowledging the report during Tuesday’s Morning Meeting, which was recorded before Amazon’s denial, Jim said he’s most concerned with how much of the tariff costs are being absorbed by Amazon. Amazon is set to report earnings after Thursday’s close. On Sunday, in our look at the week ahead, we wrote : “Amazon’s forward commentary on how the tariffs are affecting its e-commerce, Amazon Web Services, and advertising businesses will carry greater weight than the first-quarter results themselves.” Ahead of the numbers, we’re not making changes to our Club price target of $240 per share or our buy-equivalent 1 rating . The Club most recently added to our Amazon position on April 15, taking advantage of the stock’s decline from its all-time closing high of about $242 per share on Feb. 4 to around $181 at the time. Shares were trading around $187 on Tuesday. UBS analysts on Tuesday cut their Amazon price target to $253 per share from $272. UBS said it expects “some level of tariff-driven demand destruction due to price elasticity” to show up in its businesses. The analysts did, however, keep their buy rating on the stock. (Jim Cramer’s Charitable Trust is long AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
A combination photo shows Amazon CEO Jeff Bezos (L) in New York and U.S. President Donald Trump at the White House in Washington, DC, U.S. on December 14, 2016 and on December 20, 2017 respectively.
Shannon Stapleton (L), Jonathan Ernst (R) | Reuters
Amazon was smart to set the record straight to avoid the unwanted ire of the Trump administration.
