PDD, the Chinese parent of popular bargain online seller Temu, said its profit dropped nearly 50% in the first quarter, as a sharply different tariff environment in the U.S. added to challenges at home.

Temu’s last quarter may plausibly be its worst, in tariff terms — the Trump administration has already de-escalated somewhat on broad tariffs and cross-border postal fees — but anything short of a total rollback is likely to be disastrous for the firm.

The company is in the crosshairs of President Donald Trump’s tariffs on imports, particularly from China, which specializes in producing goods at low cost.

PDD’s stock tumbled as investments to fend off tariffs and competition led to a big miss in quarterly earnings.

Donald Trump's wide-ranging taxes on imports were briefly halted by a trade court this week before being allowed to continue, setting up a bigger legal showdown soon.