The Trump administration is contemplating the removal of Chinese companies from U.S. stock exchanges.
A possible change in policy might impact 286 Chinese firms that together have a market capitalization of $1.1 trillion.
The Trump administration is considering the possibility of removing Chinese companies from U.S. stock exchanges, a decision that could affect 286 firms 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 contemplated as part of the administration’s wider effort to tackle trade disparities and national security issues.
This situation arises after various legislative and executive measures aimed at intensifying scrutiny on Chinese firms operating in the U.S. The "Holding Foreign Companies Accountable Act," enacted in December 2020, mandates that foreign firms grant access to their audit records for three consecutive years or risk delisting.
The legislation specifically targets entities that prevent the Public Company Accounting Oversight Board (PCAOB) from inspecting their audit records, which has been a contentious point for Chinese firms citing national security issues.
Moreover, Executive Order 13959, signed in November 2020, bans U.S. investments in companies designated as "Communist Chinese military companies" by the Department of Defense.
Consequently, 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 could have significant consequences for global financial markets.
Chinese companies have increasingly sought secondary listings in places like Hong Kong and London to mitigate risks associated with U.S. regulatory actions.
For example, the apparel company Shein has encountered difficulties with its proposed initial public offering in the U.S. due to intensified regulatory scrutiny, leading it to consider other listing options.
These actions are part of a broader U.S. strategy to address concerns around national security and equitable trading practices.
Additionally, the administration has levied steep tariffs on Chinese imports, with rates soaring to 125%, and has cautioned allied countries against reinforcing trade connections with China, branding it a major violator of global trade norms.
The ongoing tensions have resulted in heightened volatility in global financial markets, with substantial fluctuations in stock and bond markets around the world.
As the economic and political relationship between the U.S. and China continues to develop, the circumstances remain dynamic.
This situation arises after various legislative and executive measures aimed at intensifying scrutiny on Chinese firms operating in the U.S. The "Holding Foreign Companies Accountable Act," enacted in December 2020, mandates that foreign firms grant access to their audit records for three consecutive years or risk delisting.
The legislation specifically targets entities that prevent the Public Company Accounting Oversight Board (PCAOB) from inspecting their audit records, which has been a contentious point for Chinese firms citing national security issues.
Moreover, Executive Order 13959, signed in November 2020, bans U.S. investments in companies designated as "Communist Chinese military companies" by the Department of Defense.
Consequently, 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 could have significant consequences for global financial markets.
Chinese companies have increasingly sought secondary listings in places like Hong Kong and London to mitigate risks associated with U.S. regulatory actions.
For example, the apparel company Shein has encountered difficulties with its proposed initial public offering in the U.S. due to intensified regulatory scrutiny, leading it to consider other listing options.
These actions are part of a broader U.S. strategy to address concerns around national security and equitable trading practices.
Additionally, the administration has levied steep tariffs on Chinese imports, with rates soaring to 125%, and has cautioned allied countries against reinforcing trade connections with China, branding it a major violator of global trade norms.
The ongoing tensions have resulted in heightened volatility in global financial markets, with substantial fluctuations in stock and bond markets around the world.
As the economic and political relationship between the U.S. and China continues to develop, the circumstances remain dynamic.
