JD.com Reportedly Pledges $27B To Support Local Sellers Hurt By US Tariffs, Fellow Chinese Retailers Extend Relief Too
Synopsis
The moves are in response to an escalating trade war between the U.S. and China, which will likely make imports and exports between the two nations unviable.
Chinese e-commerce giant JD.com Inc (JD) said on Friday it will launch a 200 billion yuan ($27.35 billion) fund to help the country's exporters sell their products domestically over the next year, according to Reuters.
As part of the effort, JD will directly purchase goods from those sellers and set up a special area on its e-commerce platform for those items.
The move is in response to an escalating trade war between the U.S. and China, which will likely make imports and exports between the two nations unviable.
The U.S. raised import duties on Chinese goods to 145%, and China responded by imposing a 125% tariff rate on American imports.
The Donald Trump administration later said that imports of smartphones, computers, and some electronics would be subject to a lower duty for now.
While it lifted some companies, such as Apple (AAPL), the move furthered the risks of policy uncertainty.
China has said it will ignore any further escalation from the U.S.
In any case, Chinese exporters are set for disruption. According to reports, Amazon (AMZN) has canceled orders from China for items ranging from scooters to air conditioners, while local sellers are considering ceasing selling in the U.S. altogether.
Other Chinese retailers have also announced similar moves to support local businesses.
Alibaba-owned supermarket chain Freshippo has started a program to support exporters to sell locally, according to Reuters.
Like JD, Freshippo will set up a special zone on its platform to sell only those products.
China's largest supermarket operators, CR Vanguard and Yonghui Superstores, have reportedly announced similar support measures.
On Stocktwits, retail sentiment for JD improved slightly but remained in the 'bullish' territory, while message volume remained high. U.S.-listed shares rose 2.4% on Friday in their third session of gains.
JD shares are up 6.3% year to date.
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