Shares of U.S.-listed China technology stocks including Alibaba (BABA), Baidu (BIDU), JD.com (JD), iQIYI (IQ) and Vipshop (VIPS) are falling after the Trump administration announced plans to implement additional tariffs on Chinese goods. ADDITIONAL TARIFFS: On Tuesday, the Office of the U.S. Trade Representative released a list of 10% tariffs on $200B in Chinese goods, escalating a growing trade war with Beijing, CNBC reported. The tariffs, which will undergo a two-month review process, are roughly equal to China's exports to the U.S. and some of the products on the list are from sectors of Made in China 2025, a strategic plan to make China a leader in global industries like technology. When compiling the list, the office considered what products could cause disruption to China's economy, according to a senior administration official. "For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition," U.S. Trade Representative Robert Lighthizer said in a statement. "Rather than address our legitimate concerns, China has begun to retaliate against U.S. products." The move comes after President Donald Trump threatened to implement tariffs on at least $500B on Chinese goods if China retaliated against the $34B in tariffs that went into effect Friday. Despite the threats, China established retaliatory tariffs. CHINA RESPONDS: On Wednesday, China's commerce ministry said the proposed U.S. tariffs on the additional $200B of goods are "completely unacceptable" and Beijing will have to respond, Reuters reported. The ministry said the actions taken by the Trump administration hurt America's own interests, China and the rest of the world. VIPSHOP DOWNGRADE: Meanwhile, Goldman Sachs analyst Ronald Keung downgraded Vipshop to Neutral from Buy and lowered his price target to $13.10 from $19.20. The analyst said that while he sees the company as "an innovative player exploring newer e-commerce models," he believes there is "fierce competition" and near-term risk to consensus earnings estimates as management steps up its marketing spending on attracting new users. The cost of attracting new users will drag on margins for the coming quarters, Keung said. However, he still sees long-term upside from the company's partnerships with JD and Tencent (TCEHY), as well as new initiatives such as the mini program open platform. PRICE ACTION: In morning trading, shares of Alibaba trading in New York dropped 1.85% to $188.99, Baidu fell 0.4% to $260.27, JD.com was down 1.7% to $37.03, iQIYI dropped 0.6% to $30.09 and Vipshop fell 2.3% to $10.44.
