Biden targets Chinese online retailers, Temu parent PDD slips

Shares of Temu parent company PDD Holdings (PDD) fell on Friday morning after the Biden administration targeted Chinese retailers' alleged abuse of a US trade loophole. Alibaba (BABA) and JD.com (JD) shares are also under pressure, while US-based online retailer Etsy (ETSY) is seeing gains.

Morning Brief Hosts Seana Smith and Brad Smith discuss the impact on digital retailers and what it means for investors.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Naomi Buchanan.

Video Transcript

Let's take a look at shares of PDD as the Biden administration targets Chinese retailers, TMU and Xian with new rules to curb alleged abuse of a US trade loophole.

Shares of PDD are down right now by about 6%.

Of course, they've been heavy in advertising mode, making sure that their subsidiaries and primarily T mo looking at how they can make sure that they have uh a continued expansion more so internationally here.

Who could forget this last year's Super Bowl and the amount of ads that were Tu A I mean, it was essentially like what tide was doing a couple of years back.

Psych.

It's a tide ad like no psych.

It's a Tu ad almost every single commercial break it felt like.

So all these things considered, this is gonna be a big hit at least in the near term potentially if the Biden administration takes more action, curbing some of the uh availability or the ability for these Chinese uh digital marketplaces to really grow uh on top of the client base that they've already secured here in the US.

Yeah.

And these are crackdowns that those within the US US based companies have been advocating for talking about the disadvantage that they are then put out as a result of these loopholes.

And it's not just PDD PDU Duo who's following on this news.

It's also important to point out that we're seeing some pressure across the board when it comes to some of those larger cap uh Chinese companies here.

When you take a look at Baidu, that's also moving to the downside here.

When you take a look at Alibaba, those shares of just about 1% selling internationally via its Aliexpress site there, jd.com also under a bit of pressure here today.

On the flip side, those that are as a result of this Etsy, Etsy shares have been up about 7%.

Now, up just about 4.5%.

We know Etsy's management has been very vocal about this and that we think that targeted regulation focused on cracking down on abuse may be very appropriate making that statement before this crackdown was announced.

But again, the White House taking some steps to address this as a result.

We're seeing some of those uh Chinese listed us names under pressure.

Yeah, if you were holding your breath for a she and IP O for some reason or another, uh don't any longer just kind of exhale.