Alibaba slides 10% after Trump threatens to raise China tariff by additional 50%

BABA sinks below $106 on Monday, down more than 10%.
Dow Jones sinks over 2%.
Asian stock plunge on trade war triggered by Trump tariffs.
Trump suggests he may add an additional 50% tariff to Chinese goods.

Clay Webster FXStreet

Alibaba (BABA) stock plunged 10% just before noon on Monday after US President Donald Trump threatened Xi Jinping's China with an additional 50% hike of the existing US tariffs.

In a post on his Truth Social platform, Trump wrote, "If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL tariffs on China of 50%, effective April 9th."

China hit US imports with an additional 34% tariff last Friday following the Trump administration's policy of adding a 34% tariff to its existing 20% tariff on Chinese goods.

Trump Truth Social post for April 7, 2025

According to the Cato Institute think tank in Washington, some Chinese goods could see tariff rates near 130% if Trump follows through on his rhetoric. As it stands, the US currently has a minimum 54% tariff on Chinese goods, although certain sectors like pharmaceuticals and semiconductors have been exempted.

Trump also said he would terminate any trade meetings that China has requested if China's 34% tariff on US goods goes into effect.

The Dow Jones Industrial Average (DJIA) has lost 2% by noon on Monday, while the NASDAQ Composite and S&P 500 are both down around 1.5%. Several Asian stock markets triggered circuit breaker stops earlier on Monday due to intense sell-offs. Those include the South Korean and Taiwan stock markets.

Alibaba stock chart

Alibaba stock blasted through support at $120 on Monday. The next stop is $96, a level it hasn't seen since late January. The Relative Strength Index (RSI) has sunk to 26 for the first time since December 2023.

The next support comes at $80, where BABA found support recently in mid-January. That was before positive signs emerged from the Chinese government and renewed interest in Alibaba's various Qwen AI models pushed the share price above $145 this spring.

BABA daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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