A possible change in policy might impact 286 Chinese companies whose total market capitalization amounts to $1.1 trillion.
The Trump administration is considering the possibility of ousting Chinese firms from U.S. stock exchanges, a decision that could affect 286 companies with a combined market value of around $1.1 trillion as of March 2025. Treasury Secretary Scott Bessent stated that all options, including delisting, are being explored as part of the administration's larger approach to tackle trade inequalities and national security issues.
This move is in line with a range of legislative and executive actions intended to enhance oversight of Chinese companies in the U.S. In December 2020, the "Holding Foreign Companies Accountable Act" was passed, mandating foreign firms to grant access to their audit records for three consecutive years or risk delisting.
The law specifically targets companies that do not permit the Public Company Accounting Oversight Board (PCAOB) to examine their audit documents, a requirement that has caused tensions with Chinese businesses citing national security reasons.
Furthermore, Executive Order 13959, signed in November 2020, bans U.S. investments in companies labeled as "Communist Chinese military companies" by the Department of Defense.
As a result, the New York Stock Exchange began the delisting process for China Mobile, China Telecom, and China Unicom in January 2021.
The potential delisting of Chinese firms carries wider consequences for global financial markets.
Chinese companies have increasingly pursued secondary listings in markets like Hong Kong and London to lessen the risks posed by U.S. regulatory measures.
For example, the apparel brand Shein has encountered obstacles in its planned U.S. IPO due to increased regulatory scrutiny, leading to considerations of alternative listing options.
These actions are part of a broader U.S. government strategy to address national security and fair trade practice concerns.
The administration has also imposed hefty tariffs on Chinese imports, with rates soaring to 125%, and has cautioned allied countries against deepening trade ties with China, marking it as a significant transgressor in international trade conduct.
The ongoing tensions have resulted in greater volatility across global financial markets, marked by notable fluctuations in stock and bond prices worldwide.
The situation is still evolving as both the U.S. and China navigate the intricacies of their economic and political dynamics.
This move is in line with a range of legislative and executive actions intended to enhance oversight of Chinese companies in the U.S. In December 2020, the "Holding Foreign Companies Accountable Act" was passed, mandating foreign firms to grant access to their audit records for three consecutive years or risk delisting.
The law specifically targets companies that do not permit the Public Company Accounting Oversight Board (PCAOB) to examine their audit documents, a requirement that has caused tensions with Chinese businesses citing national security reasons.
Furthermore, Executive Order 13959, signed in November 2020, bans U.S. investments in companies labeled as "Communist Chinese military companies" by the Department of Defense.
As a result, the New York Stock Exchange began the delisting process for China Mobile, China Telecom, and China Unicom in January 2021.
The potential delisting of Chinese firms carries wider consequences for global financial markets.
Chinese companies have increasingly pursued secondary listings in markets like Hong Kong and London to lessen the risks posed by U.S. regulatory measures.
For example, the apparel brand Shein has encountered obstacles in its planned U.S. IPO due to increased regulatory scrutiny, leading to considerations of alternative listing options.
These actions are part of a broader U.S. government strategy to address national security and fair trade practice concerns.
The administration has also imposed hefty tariffs on Chinese imports, with rates soaring to 125%, and has cautioned allied countries against deepening trade ties with China, marking it as a significant transgressor in international trade conduct.
The ongoing tensions have resulted in greater volatility across global financial markets, marked by notable fluctuations in stock and bond prices worldwide.
The situation is still evolving as both the U.S. and China navigate the intricacies of their economic and political dynamics.