Donald Trump has not hesitated to impose tariffs when he returns to the White House in 2025. He has indicated his intentions to impose 10% to 20% tariffs on imports and 60% to 100% tariffs on Chinese goods. Whether these statements are to be taken literally or they are to be understood as a negotiating tactic remains to be seen. The stock market is taking no chances and is already pricing in worst-case scenarios for Chinese stocks.
However, dismissing all Chinese businesses outright may be an overreaction, as some will not be affected by the additional tariffs. Here are two Chinese stocks that won’t be affected, worth buying on dips, and two Chinese stocks to avoid that will be affected.
Alibaba: The e-commerce stock to avoid, unless it’s too cheap to ignore
Investors in Chinese stocks have been on a rollercoaster ride as Chinese stocks have risen on new China stimulus hype and are now crumbling on fears of Trump tariffs. The e-commerce giant Alibaba Group Holding Limited NYSE: BABA A case in point. Its stock rose 38% from $85 to $117.82 on hype driven by China’s stimulus package in September, only to fall to $83.13 on November 22, 2024, a disappointing stimulus package ($1.4 trillion) and possible Trump tariffs. went
How much of Alibaba’s revenue comes from the United States? at least 1%
Alibaba is known for its e-commerce and cloud computing businesses. Most of its e-commerce revenue comes from China. However, its international revenue is increasing every year. In 2024, Alibaba expects to have $60 billion in revenue from China and $14.1 billion internationally. In the first six months of 2024, Alibaba generated $29.34 billion in Chinese e-commerce revenue and $6.4 billion in international e-commerce revenue.
In Q3 2024, Alibaba generated total revenue of $33.7 billion. Chinese e-commerce revenue, mainly from Tmall and Taobao, totaled $13.5 billion, and international e-commerce revenue from the AliExpress and Trendyol platforms was $3.38 billion. The company does not report totals by region. Alibaba.com is a B2B site that consolidates its revenue with an international segment.
N August 2023 Statistica Survey indicated that 11% of AliExpress buyers were from the United States. Assuming 11% of AliExpress’ Q3 revenue, or $371.8 million, came from the United States, that would be less than 1% of total quarterly revenue. This would result in little impact on Alibaba, but concerns of a 60% to 100% import tax could still keep the stock down. Additionally, through its B2B site in the US There is no disruption to how much income is generated. Emotion often dictates price; So, consider avoiding it.
PDD Holdings: Temu.com development avoids this
Chinese social e-commerce platform operator PDD Holdings Inc. NASDAQ: PDD Saw that Pinduoduo was so successful that it launched an international version called Temu.com. Tamu exploded in popularity in the United States thanks to incredibly low prices, app gamification, social media influencers, and a marketing blitz.
According to ECDB, in 2023, Tamu was born $6 billion in sales from the United Stateswhich was 43% of its gross merchandise volume (GMV).. It is estimated that the income of the United States will increase by more than 50% in 2024. PDD generates $34.9 billion in total revenue in 2023. United States e-commerce sales account for 5.8% of total revenue. Tamu has also received backlash regarding its app as a national security threat. The combination of tariff and regulatory risk puts PDD Holdings on the avoid list.
JD.com: China’s Amazon.com lives in its own lane, the Chinese market
So far, we have covered Chinese e-commerce businesses. JD.com Inc. NASDAQ: JD It is often called the largest retailer in China Amazon.com Inc. NASDAQ: AMZN of China JD.com primarily serves Chinese customers in China and internationally. They have warehouses in the United States to improve logistics when shipping goods to Chinese customers in the United States.
JD.com’s e-commerce business caters to Chinese customers, as they don’t even have an official English version of their website. Prices are in yuan, and descriptions are in Chinese. Alibaba has a large international presence in this department. JD.com doesn’t indicate that its revenue is broken down by region, so it’s best to assume that they don’t generate any material e-commerce revenue from the United States. This is why its stock is outperforming globalized Chinese e-commerce stocks. JD shares are trading up 20% year-to-date (YTD), PDD is down 31.6% YTD, and BABA is up 7.2% YTD. Lacking meaningful US e-commerce revenue, JD.com should not be affected by the Trump tariffs.
Lee Auto: Smart EREV is selling outside of China and the United States
Chinese new energy vehicle manufacturer Lee Auto Inc. NASDAQ: LI profitable and growing in China. The Auto/Tyre/Truck sector The company has found the right formula to address the key paint points of electric vehicles (EVs), range, and charging concerns. Lee Auto’s Extended Range Electric Vehicles (EREV) are also equipped with a motor that is used strictly to recharge the battery. This enables their EREVs, such as its luxury L9, to drive up to 877 miles compared to 174 on battery only. Drivers no longer have to worry about running out of power while driving an EV. The company has just crossed its one million vehicle delivery and continues to grow. Its first fully electric vehicle, the Mega, had a very poor reception, which led them to delay the launch of their second all-new EV until the latter half of 2025.
100% tariffs already keep Lee Auto vehicles out of the United States
Lee Auto does not sell any of its vehicles in the United States due to the current 100% tariff on Chinese vehicles. The company is not planning to enter the US market but is entering Europe. No other Trump tariffs will affect Lee Auto.
Before you consider Alibaba Group, you may want to hear this.
MarketBeat keeps track of Wall Street’s top-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified Five stocks That top analysts are quietly telling their clients to buy now before the broader market hits… and Alibaba Group was not on the list.
Although Alibaba Group currently has a “moderate buy” rating among analysts, top analysts believe these five stocks are better buys.
Just getting into the stock market? These 10 simple stocks can help beginner investors build long-term wealth without knowing options, technicals or other advanced strategies.
