The Trump administration is evaluating the possibility of removing Chinese companies from U.S. stock exchanges.
A possible change in policy may impact 286 Chinese firms that have a total market capitalization of $1.1 trillion.
The Trump administration is exploring the option of removing 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 possibilities, including delisting, are being considered as part of the administration’s wider strategy to tackle trade imbalances and national security issues.
This shift comes after a series of legislative and executive measures aimed at enhancing oversight of Chinese companies operating within the U.S. The "Holding Foreign Companies Accountable Act," passed in December 2020, mandates that foreign companies must grant access to their audit records for three consecutive years or risk delisting.
The legislation specifically focuses on companies that do not permit the Public Company Accounting Oversight Board (PCAOB) to examine their audit reports, a demand that has sparked disagreements with Chinese companies citing national security reasons.
Moreover, Executive Order 13959, issued in November 2020, bans U.S. investments in firms classified 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 delisting of Chinese companies could have significant ramifications for global financial markets.
To alleviate the risks stemming from U.S. regulatory actions, Chinese firms have increasingly pursued secondary listings in markets like Hong Kong and London.
For example, the apparel company Shein has faced difficulties with its planned U.S. initial public offering due to increased regulatory oversight, leading to considerations of alternative listing options.
These actions are part of a broader approach by the U.S. government to address national security concerns and ensure fair trade practices.
Additionally, the administration has implemented substantial tariffs on Chinese imports, with rates soaring as high as 125%, and has cautioned allied countries against strengthening trade relations with China, labeling it a significant wrongdoer in global trade dynamics.
The escalating tensions have resulted in heightened volatility in global financial markets, with considerable fluctuations in stock and bond markets worldwide.
The situation is continually evolving as both the U.S. and China navigate the intricacies of their economic and political relationship.
This shift comes after a series of legislative and executive measures aimed at enhancing oversight of Chinese companies operating within the U.S. The "Holding Foreign Companies Accountable Act," passed in December 2020, mandates that foreign companies must grant access to their audit records for three consecutive years or risk delisting.
The legislation specifically focuses on companies that do not permit the Public Company Accounting Oversight Board (PCAOB) to examine their audit reports, a demand that has sparked disagreements with Chinese companies citing national security reasons.
Moreover, Executive Order 13959, issued in November 2020, bans U.S. investments in firms classified 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 delisting of Chinese companies could have significant ramifications for global financial markets.
To alleviate the risks stemming from U.S. regulatory actions, Chinese firms have increasingly pursued secondary listings in markets like Hong Kong and London.
For example, the apparel company Shein has faced difficulties with its planned U.S. initial public offering due to increased regulatory oversight, leading to considerations of alternative listing options.
These actions are part of a broader approach by the U.S. government to address national security concerns and ensure fair trade practices.
Additionally, the administration has implemented substantial tariffs on Chinese imports, with rates soaring as high as 125%, and has cautioned allied countries against strengthening trade relations with China, labeling it a significant wrongdoer in global trade dynamics.
The escalating tensions have resulted in heightened volatility in global financial markets, with considerable fluctuations in stock and bond markets worldwide.
The situation is continually evolving as both the U.S. and China navigate the intricacies of their economic and political relationship.
