U.S.-listed shares of major Chinese corporations, including Alibaba Group Holding Ltd. (NYSE:BABA), Baidu Inc. (NASDAQ:BIDU), PDD Holdings Inc. (NASDAQ:PDD), JD.com Inc. (NASDAQ:JD), NIO Inc. (NYSE:NIO), Li Auto Inc. (NASDAQ:LI), and XPeng Inc. (NYSE:XPEV), slid on Friday amid escalating geopolitical tensions between Beijing and Washington.
This market downturn reflects a broader, ongoing friction that is fundamentally reshaping global trade flows.
Chinese Exporters Pivot Amid Tariff Uncertainty
In a direct response to unpredictable U.S. tariffs and intensifying trade disputes, Chinese exporters are actively shifting sales away from the United States and redirecting them toward markets in Europe, Latin America, the Middle East, and Africa.
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The ongoing cycle of tit-for-tat tariffs, fleeting truces, and looming triple-digit duties on Chinese goods—retaliation for Beijing's rare earth export curbs—has upended global trade flows, driven down prices, and sharply intensified overseas competition, Reuters reported.
Escalating Retaliation and Control Over Critical Materials
In a further escalation, China has tightened its rare earth export controls and expanded oversight for semiconductor users as a countermeasure to U.S. sanctions.
These new regulations mandate that foreign manufacturers utilizing Chinese equipment or materials must obtain specific licenses.
Such actions firmly reinforce Beijing’s control over critical materials essential for a range of products, from electric vehicles to advanced military radar systems.
Although overall Chinese exports saw a 7.1% rise in the first nine months of 2025, many individual manufacturers state that their order volumes and revenues have been cut in half, with some even resorting to selling products at a loss in their urgent scramble for global diversification.
Sanctions Disrupt Shipbuilding Cooperation
The geopolitical friction has spilled into the maritime industrial base. China’s sanctions on U.S.-linked units of Hanwha Ocean are actively disrupting shipbuilding cooperation between Seoul and Washington by blocking supplies of Chinese equipment and materials.
This move coincides with the U.S. and China imposing additional port fees on each other’s vessels amid ongoing trade tensions.
The development raises serious concerns over the execution of South Korea’s massive $150 billion investment plan designed to support U.S. shipbuilding, Reuters reported on Friday.
Officials in Seoul warn that these sanctions could impede material supply to Philly Shipyard and other U.S. subsidiaries, potentially costing $60 million over two years and causing delays in vessel deliveries.
The Semiconductor Battleground
Geopolitical tensions gained significant traction following the 2020 pandemic in China, which severely disrupted the global semiconductor supply chain, triggering a chip crisis for consumer gadgets and automobiles.
This crisis prompted nations globally to concentrate on consolidating their domestic chip manufacturing position to reduce reliance on China.
The U.S., for instance, began tapping chipmakers like Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) and Intel Corp. (NASDAQ:INTC) to focus on domestic chip plants while simultaneously extending restrictions on China’s access to sophisticated semiconductor technology.
This strategy, citing national security threats, stemmed from U.S. sanctions on the Chinese smartphone giant Huawei in May 2019, under then-President Donald Trump.
Subsequently, the U.S. government under President Joe Biden further restricted China’s reliance on technologies from companies like Nvidia Corp. (NASDAQ:NVDA), Micron Technology Inc. (NASDAQ:MU), and ASML Holding NV (NASDAQ:ASML), which are pivotal in achieving artificial intelligence ambitions.
U.S. sanctions on companies such as Nvidia have directly affected Chinese tech giants, including Alibaba, which remain aggressively invested in their AI endeavors to unlock new value.
President Trump, during his campaign days, had consistently emphasized the domestic production of goods, threatening tariffs on trading partners to promote manufacturing in the U.S.
Price Action
Alibaba (BABA) stock was trading lower by 3.39% to 159.49 premarket at last check Friday. Baidu (BIDU) dropped 4.05%, PDD Holdings (PDD) declined 3.15%, and JD.com (JD) slid 2.69%.
Electric vehicle makers also saw losses, with Nio (NIO) down 5.12%, Li Auto (LI) falling 2.39%, and XPeng (XPEV) dropping 4.68%.
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