Shares in Chinese e-commerce giant Alibaba (BABA) were flat in early trading today after a new loophole in President Trump’s tariffs strategy was revealed.
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Small Packages in Trump’s Firing Line
Trump’s imposition of 25% levies on Canada and Mexico and a 10% duty on China in the last few days has, it is understood, removed the previous “de minimis” exemption for items under $800. The term “de minimis” means “trifles” or items of minimal value such as toiletries and toys well-known to any Alibaba shopper especially around Christmas time.
Under the exemption, small package products below $800 were able to enter the US without tariffs benefiting the top and bottom line of Chinese ecommerce retailers such as Alibaba.
This did not just earn the ire of Trump but also consumers and safety organisations concerned that some of these goods could be faulty, low on quality and potentially containing illegal or dangerous items.
Chinese Retail Growth Could Suffer
It is therefore not just Alibaba under pressure from this tariffs twist but other Chinese retailers such as PDD Holdings (PDD) ,which owns Temu, and JD.com (JD). It should provide an uplift however for the likes of Amazon (AMZN) but its share price was lower in early trading.
Citigroup analyst Alicia Yap said the impact on Temu could have a “negative read-through to its growth in 2025 and beyond”. Investors seem concerned that this sentiment is likely applicable to Alibaba as well.
Is BABA a Good Stock to Buy?
On TipRanks, BABA has a Strong Buy consensus based on 11 Buy and 1 Hold rating. BABA stock’s consensus price target is $121.33 implying an 22.15% upside.
