By Katherine Hamilton

Shares of Chinese online retail companies pared back losses after the U.S. Postal Service said it would resume accepting packages from China and Hong Kong--a reversal from its announcement the previous night that it would stop accepting such packages--though the stocks remained down amid continued uncertainty about the effect of tariffs.

Chinese online marketplace Alibaba saw its New York-traded American depositary receipts fall as low as $99.69, a 2.6% drop from market close on Tuesday, but they recovered some of their loss Wednesday morning. New York-traded ADRs of PDD, which owns budget e-retailer Temu, dipped as much as 4.6% to $108.83 after market close, and were still recently down 3%.

The stocks have had a week of ups and downs as the Trump administration's 10% tariffs on Chinese imports threaten to upend their distribution of low-cost products to U.S. customers. The USPS said Wednesday morning it is working with Customs and Border Protection to establish an efficient way to collect the new tariffs while limiting distribution to package delivery.

Some U.S.-based companies that rely on cheap shipping from China also reacted. Amazon's stock fell as much as 2.7% from Tuesday's closing price.

As part of the tariffs, Trump also closed a trade loophole that has helped many Chinese retailers keep prices low for U.S. customers. The loophole, called de minimis, allows exports under $800 to enter the U.S. without duties, and has been crucial savings for e-commerce companies selling cheap clothing, electronics and furniture from China.

Nearly 1.4 billion shipments in 2024 claimed the de minimis exemption, a more-than-sixfold increase from a decade ago, Customs and Border Protection said in January. The cost savings of de minimis has helped companies like Temu offer prices 20% to 40% lower than U.S. competitors and make an estimated $20 billion in 2024, KeyBanc analyst Brad Thomas told The Wall Street Journal.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

February 05, 2025 11:04 ET (16:04 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.