Why Alibaba Stock Is Tanking Today

Core Viewpoint - Alibaba's shares have experienced a significant decline, losing up to 13.9% in value, primarily due to new tariffs imposed by the U.S. government targeting Chinese e-commerce platforms [1][4]. Group 1: Impact of Tariffs - President Trump's executive order has eliminated the de minimis tariff exemptions for packages valued up to $800 from China and Hong Kong, meaning all shipments will now be subject to tariffs regardless of their value [2]. - The U.S. government has accused Chinese companies, including Alibaba, of engaging in "deceptive shipping practices," which have exploited the de minimis exemption to smuggle illicit substances [3]. Group 2: Market Dynamics - The volume of de minimis shipments entering the U.S. surged to 1.36 billion last year, a significant increase from 139 million in 2015, indicating a growing reliance on low-value imports from Alibaba and its competitors [3]. - The changes in tariff policy represent a substantial disruption for Alibaba, necessitating adjustments to its cross-border business model to remain competitive in the market [4].