Stocks immersed themselves on Thursday in response to the “Reciplon Rates of President Donald Trump.
Although the President had telegated his desire for punitive rates to try to balance the United States’s commercial deficit with much of the world, investors were affected by their size. China has long served as a scapegoat for Trump, so it may not be a surprise that the goods imported from China are now facing a 54% rate, which includes a rate of 20% the president imposed above.
North – Ishares MSCI China ETF On Thursday only 0.9%went down.
International stocks are overcoming the stocks of the United States to the present year and this makes sense. International actions not only have less exposure to the Trump trade war and the weakening of consumers’ confidence in the United States, but the valuations are much lower in international own resources, especially in the year.
China’s shares are especially cheaply right now, and one that has been a prominent performer in recent years is Holdings pdd (NASDAQ: PDD)Pinduoduo and Temu’s father, which is difficult Alibaba and Jd.com For the supremacy of e -commerce in China. We take a look at what PDD bag investors should know about the rates.
Image Source: Getty’s pictures.
The 54% rates that are imposed in China will affect the Chinese economy in a variety of ways. There are already several companies like Nike They have moved part of their production from China to neighboring countries like Vietnam, and this trend could be accelerated as companies seeking to avoid rates transfer production to countries with lower rates or even in the United States.
By 2024, North -American imports from China amounted to $ 438.9 billion. In addition to sending production outside of China, the trade war could also weigh an already weak Chinese economy if the goods are more expensive and China has already said that it will impose its own rates to protect its economy and its interests.
The impact size in the Chinese economy is unclear, but more weaknesses of consumers in e -commerce operators such as PDD Holdings will be weighed.
PDD Holdings does not break down its income by region, but the company has made considerable effort in the Temu marketing, its low cost e -commerce platform, so it has made the digital advertising market more competitive and has taken market share of several e -commerce companies and other retailers.
Amazon He has responded to the threat of Temu and Shein throwing Haul, his own low cost platform, although it is not clear how it works.
PDD obtained income of $ 54 million by 2024, but its volume of Grup goods (GMV) or the value of goods sold on its platform is much larger. At least the company probably made $ 5 billion in GMV in the United States, but is probably several times greater than this, given the impact of Temu on the e -commerce market.
Advertising is the largest source of income for the company, so it also depends that advertisers trust customers who spend on the platform.
Prior to the announcement of the rates, some investors were already rotating in Chinese actions, including billionaire David Tepper, seeing an opportunity there, as Chinese actions are much cheaper than their North -America counterparts.
In this regard, PDD Holdings could benefit if the rates push the United States economy in a recession, as it is one of the most popular Chinese actions than North -Americans in investors.
Although its growth rate has been reduced in the last quarter, the company registered a 24% income growth in the fourth quarter, continuing to overcome competitors such as Alibaba and JD.com.
In a Ratio de Preu-Benefici Of only 11, there is a good argument to buy PDD based on their foundations.
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John Mackey, a former CEO of Whole Foods Market, a Amazon subsidiary, is a member of the Board of Directors of the Motley Fool. Jeremy Bowman It has positions in Amazon and Nike. The Motley Fool has positions and recommends Amazon and Nike. The Motley Fool recommends Alibaba Group and JD.com. The mold’s fool has a Outreach policy.
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