Alibaba Shares Drop Over 5% Amid Escalating US-China Tariff Tensions: What's Going On?

Shares of Alibaba Group Holding Limited BABA are falling Tuesday as tensions between the United States and China reignited fears of a prolonged trade war.

What To Know: The move follows comments from Treasury Secretary Scott Bessent, who described China's recent tariff threats as a strategic misstep during an appearance on CNBC's Squawk Box. "I think it was a big mistake, this Chinese escalation, because they’re playing with a pair of twos," Bessent said, emphasizing that China exports significantly more to the U.S. than it imports, placing it at a disadvantage in a tariff standoff.

President Donald Trump also stated he would impose an additional 50% tariff on Chinese imports if Beijing does not roll back its current retaliatory duties on U.S. goods. In response, China's Commerce Ministry declared it would "fight to the end," rejecting what it called a "mistake on top of a mistake."

While the broader market opened higher — with the S&P 500 and Nasdaq 100 indexes gaining over 3% — Chinese tech stocks listed in the U.S. saw notable weakness. Alibaba and PDD Holdings Inc. PDD are both trading lower on growing investor concern over the economic fallout of further tariff escalation.

BABA Price Action: Alibaba shares are down 7.56% at $97.97 at the time of writing, according to Benzinga Pro.

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