Bank of America analysts have identified Etsy as the biggest potential beneficiary of the Supreme Court's decision to strike down President Trump's IEEPA tariffs, creating a significant tailwind for small- and mid-cap e-commerce companies. The ruling initially sparked a rally across the sector, though gains narrowed after Trump announced a new global tariff under Section 122.

According to BofA's Michael McGovern, Etsy's unique business model positions it to manage tariff volatility more efficiently than peers. The company's diversification across trade routes and countries means no single import country accounts for more than 4% of sales, with top sourcing markets including the U.K., Canada, Türkiye, India and Ukraine representing only half its import exposure.

BofA believes Etsy's wide geographic spread provides a strong "replacement factor" when tariffs lift costs in one market, helping sellers adjust without major disruption. The company's management focuses less on which legal tool the administration uses and more on ensuring tariff and customs regimes "fit microbusiness specific realities." Among Etsy's peers, eBay could be the next-largest beneficiary, while Chewy and CHWY face more muted effects given existing tariff structures and diversified supply chains.