Ahead of this week's trade talks between the two countries, the timing of the U.S. action "is going to be awkward for the Chinese."
The stock had risen 42% this year as the warehouse retailer benefited from strong consumer spending.
The company will become the first foreign platform to offer digital payment services in China by acquiring 70% of a domestic provider.
With its fiscal year-end looming, the SEC disclosed charges and settlements against seven different organizations in two days.
The drop is due in part to trade concerns and fears of a sustained global slowdown.
“There are no recent precedents to guide any policy response to the current situation," the Federal Reserve chairman warns.
The country is feeling the effects of trade conflicts and global uncertainty.
“We definitely saw significant impact on our business in China as it relates to what's going on with the trade war right now."
Analysts warn of a hit to earnings and iPhone demand if President Trump follows through with a 10% tariff on Chinese goods.
Alibaba's move to open its platform to U.S. sellers puts it "in direct competition with Amazon in the business-to-business online marketplace."
"Trade-related uncertainty in Asia impacted our software revenue performance in the region," CFO Luka Mucic says.
Institutional investors and analysts express concerns on geopolitical tensions and a slowing global economy.
