By George Glover

Chinese companies' U.S. shares were rising on Tuesday, suggesting investors weren't too rattled by the start of a new trade war between Beijing and Washington.

Alibaba American depositary receipts were up 1.6% ahead of the U.S. open, while shares of the online retailer's rival JD.com rose 3.9%. Electric vehicle maker XPeng added 7%, and Temu parent PDD and search-engine provider Baidu both climbed 2.3%.

Hong Kong's benchmark Hang Seng Index had closed 2.8% higher, with mainland exchanges still closed for the Lunar New Year holiday.

The stocks were rallying despite the U.S. and China going tit-for-tat on tariffs to start the week. After President Donald Trump said he would hike duties on Chinese imports by 10%, Beijing hit back with taxes of its own and said it would launch an antitrust probe into Google parent Alphabet.

The market likely sees Trump pausing tariffs on Mexico and Canada as a sign he may be willing to broker a similar deal with China. "The retaliatory tariffs from China are targeted and not broad based, which suggests a conciliatory stance from Beijing that could open the door to negotiation with Trump," XTB research director Kathleen Brooks said.

Write to George Glover at george.glover@dowjones.com

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(END) Dow Jones Newswires

February 04, 2025 05:57 ET (10:57 GMT)

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