By Kelly Cloonan
Shares of Chinese online retail companies Alibaba Group Holding and PDD Holdings rose after the U.S. and China agreed to scale back tariffs on each others' goods.
Alibaba's New York-traded American depositary receipts rose 6.4% to $133.40 on Monday. New York-traded ADRs of PDD, which owns budget e-retailer Temu, ticked up 6.9% to $117.22.
The companies have come under pressure in recent months amid an escalating U.S.-China trade war as the Trump administration imposed higher tariffs on goods from China and Beijing responded with its own on the U.S.
The higher tariffs have been expected to raise Alibaba and Temu's prices, likely dragging on demand for their clothing, gadgets and other low-cost products.
The companies are now seeing some relief after the U.S. and China said Monday that Trump's "reciprocal" tariff on China would be cut to 10% from 125% for 90 days amid ongoing negotiations.
The companies aren't totally in the clear from the Trump administration's latest policy moves, though. On May 2, the administration eliminated the de minimis provision for low-value parcels from China, which had allowed companies to avoid import taxes and customs inspections on international shipments with a retail value of $800 or less.
The provision had led to a flood of goods from bargain sites like Temu and rival Shein into the U.S. in recent years.
Alibaba's stock is also benefiting from the company's latest artificial-intelligence initiatives. During a two-day annual gathering of Alibaba employees, the company said its operations will be driven by AI in the next three to five years, integrating the technology into every business and procedure.
"The company believes with AI application, not only does it help optimizing search recommendation, it could also create and define new user entrances in different services," Citi analysts said in a research note.
Write to Kelly Cloonan at kelly.cloonan@wsj.com
(END) Dow Jones Newswires
May 12, 2025 14:19 ET (18:19 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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