**Trump Administration Consideration of Delisting Chinese Stocks from U.S. Exchanges Intensifies**
As the U.S.-China trade war escalates, the Trump administration is reportedly exploring the possibility of delisting Chinese stocks from the New York Stock Exchange. This comes amidst growing discussions by high-level officials and Trump supporters about the potential impact. According to a report by Politico, there are nearly 300 Chinese stocks listed on U.S. securities exchanges that might face delisting, including major tech companies like Alibaba, Baidu, JD.com, and Pinduoduo.
U.S. Treasury Secretary Scott Besent stated in an interview with Fox News that, while the decision rests with President Trump, all options are being considered. Additionally, Senator Rick Scott has emphasized the need for increased scrutiny of the transparency and compliance of Chinese firms listed on U.S. exchanges with American financial disclosure regulations.
Although the seriousness with which the Trump administration is considering this move remains uncertain, the very consideration signals that the U.S. is employing all possible measures against China, as noted by Politico. The U.S.-China Economic and Security Review Commission reported that as of March 7, 286 Chinese companies were listed on U.S. exchanges, with a total market capitalization of $1.1 trillion.
In 2020, the U.S. enacted the Holding Foreign Companies Accountable Act, which could lead to the delisting of Chinese firms that fail to comply with U.S. accounting standards for two consecutive years. However, delisting could take several years to process.
Investment Bank TD Cowen’s Jarrett Seiberg suggests that Trump could leverage national security powers to expedite this process through executive orders. One proposed method is to ban the variable interest entity (VIE) structure, which allows U.S. investors to indirectly hold shares of Chinese firms. Trump has already issued an executive order for the re-examination of the VIE structure.
According to Goldman Sachs, such delistings could trigger an $800 billion sell-off in U.S.-listed Chinese stocks. Reflecting on the potential market impact, former SEC member and RockCreek Global Advisors Executive Catherine Martin warned that, compared to 2022 when U.S.-China audit access agreements were in place, the current market is far more unstable, and sudden actions without appropriate transition periods might amplify market shocks significantly.