Alibaba Group Holding saw its shares decline by more than 3% on Monday, reversing part of a prior rally, after President Trump’s renewed tariff threats rattled Asian markets. The pullback reflects heightened investor caution in the face of potential new duties on Chinese imports. Trading volume rose by 25% versus its 30-day average as portfolio managers reduced exposure to large-cap Chinese equities ahead of further trade announcements.

Analysts note that Alibaba Cloud, which holds roughly a 20% share of China’s public cloud market, is now under direct pressure from ByteDance’s rapidly expanding infrastructure business. ByteDance has added more than 15 new data centers over the past six months and is offering promotional pricing up to 30% below market rates. This aggressive expansion has prompted Alibaba to increase capital expenditure on server capacity by 18% year-over-year and to explore bundled offerings with its e-commerce and digital media divisions.

In its latest segment breakdown, Alibaba reported that its quick commerce arm recorded a 60% year-over-year uptick in revenues, driven by higher order frequency and deeper penetration in lower-tier cities. However, the unit’s gross margin contracted by 450 basis points as the company maintained heavy subsidies for delivery riders and absorbed rising fuel and warehouse costs. Management indicated that it will begin to phase out certain promotional discounts in the second quarter, targeting a 200-basis-point margin improvement by year-end.