China Hit With 54% "Reciprocal Tariff" Rate Following Trump Address. 3 Things Pinduoduo Stock Investors Should Know

Jeremy Bowman, The Motley Fool

Sat, Apr 5, 2025, 3:51 PM 4 min read

Stocks plunged connected Thursday successful effect to President Donald Trump's "reciprocal tariffs."

While the president had telegraphed his tendency for punitive tariffs to effort to equilibrium the commercialized shortage the U.S. has with overmuch of the world, investors were taken aback by their size. China has agelong served arsenic a scapegoat for Trump truthful possibly it's not a astonishment that goods imported from China volition present look a 54% tariff, which includes a 20% complaint the president imposed earlier.

U.S. stocks tumbled connected the news, but the interaction connected Chinese listings was overmuch much modest, arsenic the iShares MSCI China ETF was down conscionable 0.9% connected Thursday.

International stocks are outperforming U.S. stocks truthful acold this year, and that makes sense. Not lone bash planetary stocks person little vulnerability to Trump's commercialized warfare and the weakening user assurance successful the U.S., but valuations are overmuch little successful planetary equities, particularly entering the year.

China stocks are particularly inexpensive close now, and 1 that has been a standout performer successful caller years is PDD Holdings (NASDAQ: PDD), the genitor of Pinduoduo and Temu, which is challenging Alibaba and JD.com for e-commerce supremacy successful China. Let's instrumentality a look astatine what PDD banal investors should cognize astir the tariffs.

The 54% tariffs being imposed successful China volition impact the Chinese system successful a fig of ways. Already, a fig of companies similar Nike person moved immoderate of its accumulation retired of China to neighboring countries similar Vietnam, and that inclination could accelerate arsenic companies looking to debar the tariffs determination accumulation to countries with little rates oregon adjacent to the U.S.

In 2024, U.S. imports from China totaled $438.9 billion. In summation to sending accumulation retired of China, the commercialized warfare could besides measurement connected an already anemic Chinese system if it makes goods much expensive, and China has already said that it volition enforce its ain tariffs to support its system and its interests.

The size of the interaction connected the Chinese system is unclear, but much user weakness volition measurement connected e-commerce operators similar PDD Holdings.

PDD Holdings doesn't interruption down its gross by region, but the institution has enactment sizeable effort into selling Temu, its low-cost e-commerce platform, capable truthful that it's made the integer advertizing marketplace much competitory and it's grabbed marketplace stock from a fig of e-commerce companies and different retailers.

Amazon has responded to the menace from Temu and Shein by launching Haul, its ain low-cost platform, though it's unclear however it's performing.