The Trump administration is contemplating the removal of Chinese companies from U.S. stock exchanges.
A possible change in policy could impact 286 Chinese firms, which have a total market value of $1.1 trillion.
The Trump administration is assessing the option of delisting Chinese companies from U.S. stock exchanges, a decision that could affect 286 firms with a total market value of about $1.1 trillion as of March 2025. Treasury Secretary Scott Bessent stated that all alternatives are being considered, including delisting, as part of the administration's wider strategy to tackle trade disparities and national security issues.
This progression comes in the wake of various legislative and executive measures aimed at enhancing scrutiny of Chinese enterprises operating within the U.S. The "Holding Foreign Companies Accountable Act," enacted in December 2020, mandates that foreign companies must allow access to their audit documents for three consecutive years or risk delisting.
The legislation particularly focuses on firms that prevent the Public Company Accounting Oversight Board (PCAOB) from inspecting their audit findings, a requirement that has stirred controversy among Chinese companies citing national security reasons.
Furthermore, Executive Order 13959, which was signed in November 2020, forbids U.S. investments in entities designated as "Communist Chinese military companies" by the Department of Defense.
As a result of this order, the New York Stock Exchange began the delisting process for China Mobile, China Telecom, and China Unicom in January 2021.
The potential removal of Chinese firms from U.S. exchanges carries broader implications for global financial markets.
Chinese companies have increasingly pursued secondary listings in markets like Hong Kong and London to alleviate the risks posed by U.S. regulatory actions.
For example, the apparel company Shein has encountered difficulties with its planned initial public offering in the U.S. due to heightened regulatory scrutiny, leading it to consider alternative listing options.
These actions are a part of a larger U.S. government strategy aimed at addressing concerns regarding national security and equitable trade practices.
The administration has also enforced substantial tariffs on Chinese imports, with rates soaring as high as 125%, and has cautioned allied nations against deepening trade relationships with China, branding it as a significant violator of global trade norms.
The ongoing tensions have resulted in increased volatility within global financial markets, causing notable fluctuations in stock and bond markets around the world.
The situation remains dynamic as both the U.S. and China navigate the intricate landscape of their economic and political interactions.
This progression comes in the wake of various legislative and executive measures aimed at enhancing scrutiny of Chinese enterprises operating within the U.S. The "Holding Foreign Companies Accountable Act," enacted in December 2020, mandates that foreign companies must allow access to their audit documents for three consecutive years or risk delisting.
The legislation particularly focuses on firms that prevent the Public Company Accounting Oversight Board (PCAOB) from inspecting their audit findings, a requirement that has stirred controversy among Chinese companies citing national security reasons.
Furthermore, Executive Order 13959, which was signed in November 2020, forbids U.S. investments in entities designated as "Communist Chinese military companies" by the Department of Defense.
As a result of this order, the New York Stock Exchange began the delisting process for China Mobile, China Telecom, and China Unicom in January 2021.
The potential removal of Chinese firms from U.S. exchanges carries broader implications for global financial markets.
Chinese companies have increasingly pursued secondary listings in markets like Hong Kong and London to alleviate the risks posed by U.S. regulatory actions.
For example, the apparel company Shein has encountered difficulties with its planned initial public offering in the U.S. due to heightened regulatory scrutiny, leading it to consider alternative listing options.
These actions are a part of a larger U.S. government strategy aimed at addressing concerns regarding national security and equitable trade practices.
The administration has also enforced substantial tariffs on Chinese imports, with rates soaring as high as 125%, and has cautioned allied nations against deepening trade relationships with China, branding it as a significant violator of global trade norms.
The ongoing tensions have resulted in increased volatility within global financial markets, causing notable fluctuations in stock and bond markets around the world.
The situation remains dynamic as both the U.S. and China navigate the intricate landscape of their economic and political interactions.
