Alibaba Group Holding shares fell more than 3% on Monday, reversing a recent strong rally as investors trimmed risk ahead of potential U.S. tariff actions. The slide in Hong Kong trading came after reports that former U.S. administration officials are considering fresh levy proposals on Chinese imports. Asian equity benchmarks also dipped, with regional trade names leading losses. Analysts at a major brokerage cut their near-term growth forecast for Alibaba’s international commerce business by 50 basis points, citing heightened uncertainty over cross-border logistics costs and potential supply-chain disruptions.

Alibaba’s quick commerce unit posted a 60% year-over-year increase in revenue in the latest quarter, driven by expanded delivery routes in tier-2 and tier-3 cities and a 25% uptick in active daily users. However, the business’s heavy reliance on promotional subsidies and third-party logistics partnerships has pushed its adjusted operating margin into negative territory for the first time. Management disclosed that subsidy spending rose to 12% of transaction value, compared with 8% one year earlier. Investors are watching closely for margin recovery initiatives, including dynamic pricing algorithms and a planned shift to in-house last-mile delivery fleets by mid-year.