Temu Parent PDD Stock Tumbles As Trump's New Tariffs Threaten Chinese E-Commerce

Stocks of U.S.-listed Chinese companies, including Alibaba Group Holding BABA, PDD Holdings Inc PDD, Baidu, Inc BIDU, and JD.com, Inc JD, are trading lower Friday as markets turn jittery after President Donald Trump announces sweeping tariffs.

Trump's measures include a 34% tariff on imports from China, raising the total duties on Chinese goods to 54% and prompting criticism from Beijing.

Goldman analyst Andrew Tilton expects the Chinese government to retaliate with some targeted tariffs on U.S. products as well as non-tariff measures like export controls.

In fact, China's finance ministry has announced a 34% tariff on all goods imported from the U.S., effective from April 10.

Temu parent PDD will be especially hit as it intensifies rivalry with Amazon.Com Inc AMZN by specializing in cheaper deals. Amazon invested $25 billion in robotics-led warehouses to cut costs and compete with rivals like Temu.

Billionaire investor David Tepper's Appaloosa Management increased its stakes in prominent Chinese e-commerce names, including PDD, during the fourth quarter of 2024.

American investor Carson Block, the founder of Muddy Waters Research, had snubbed China's stock market rally, citing unreliability in corporate accounting and geopolitical risks. He voiced to Bloomberg his aversion to Chinese stocks for 15 years due to the lack of credibility of accounting, especially the ones listed outside of China.

PDD stock surged over 17% year-to-date. In March, PDD reported fourth-quarter revenue growth of 24% to $15.15 billion, missing estimates of $15.68 billion. Adjusted EPS of $2.76 beat the consensus of $2.56. At least two Wall Street firms, U.S. Tiger Securities and Nomura, have downgraded the stock's rating.

PDD Stock Prediction For 2025 Before Tariffs Were Announced

Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.

Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at PDD Holdings, an investor could make an assessment about a stock's long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. For PDD Holdings, the 200-day moving average sits at $118.86, according to Benzinga Pro, which is above the current price of $104.28. For more on charts and trend lines, see a description here.

Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.

Price Action: PDD stock is down 9.38% at $103.01 at the last check on Friday.

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