As the trade war between the United States and China grows more intense, the Trump administration is now seriously considering removing hundreds of Chinese companies from U.S. stock exchanges. While no final order has been given yet, key members of the administration and close allies of President Trump are signaling that this option is being taken seriously and could soon become reality.
A New Economic Weapon
This possible move would affect nearly 300 Chinese companies currently listed on major U.S. exchanges, including the New York Stock Exchange and Nasdaq. These firms have a combined market capitalization of approximately $1.1 trillion. Companies such as Alibaba, JD.com, and Zeekr, the electric vehicle company backed by Geely, have relied on American investors to raise billions of dollars. Since January 2024 alone, 48 Chinese companies have raised $2.1 billion in the U.S. through new listings.
Treasury Secretary Scott Bessent said in a recent interview on Fox Business, “Everything’s on the table,” when asked about the potential for mass delistings. “That will be President Trump’s decision,” he added. These remarks have added fuel to growing speculation that the administration may soon take direct action against Chinese stocks.
The idea has strong support from high-profile Trump allies like Kevin O’Leary, the investor known from the television show “Shark Tank.” Speaking on Fox Business, O’Leary said, “My estimation, as of this morning, somewhere between $500 to $700 billion worth of market capitalization should be delisted, taken off the exchanges, add further pressure on the Chinese to come to the table.” He continued, “I speak on behalf of every American investor. Enough is enough.” O’Leary argued that it is unfair for Chinese companies to operate in the U.S. without following the same accounting and financial rules as American firms.
Legal Options and Executive Power
There are a number of tools the Trump administration could use to remove Chinese companies from American exchanges. One path involves enforcing the Holding Foreign Companies Accountable Act, which Congress passed in 2020. The law gives U.S. accounting regulators the authority to review audits of foreign companies that trade in the U.S. If those companies fail to allow full inspection for two years in a row, they can be delisted.
President Trump signed an executive order in February that directed regulators to examine whether Chinese firms listed in the U.S. are meeting required financial auditing standards. According to a report by TD Cowen, a financial services firm, the fastest way to force companies off the exchanges would be for Trump to issue new executive orders based on national security concerns. This same strategy was used in 2021 to delist China Mobile, China Telecom, and China Unicom.
Another option under consideration is banning the use of variable interest entities, or VIEs. This is the corporate structure many Chinese companies use to raise money in the U.S. without giving investors direct ownership of the actual Chinese business. Trump’s February executive order also included a call to review the use of this structure.
Senator Rick Scott of Florida, a longtime critic of China’s access to American markets, expressed his support for delisting. In a letter to the new chairman of the Securities and Exchange Commission, Paul Atkins, Scott wrote, “It is alarming that Chinese companies continue to enjoy access to American capital while refusing to play by our rules. The U.S. capital markets are the envy of the world, providing unparalleled access to funding for companies worldwide. However, this privilege comes with responsibilities, chief among them being transparency and adherence to our financial disclosure rules.”
Reaction from China
The Chinese government has made it clear that it opposes the idea of delisting its companies from American markets. In a statement sent to POLITICO, a spokesperson from the Chinese embassy in Washington, Liu Pengyu, said, “As a matter of principle, China has consistently maintained that the United States should abide by international rules governing investment and trade, respect the laws of the market economy, and stop politicizing and weaponizing economic and trade issues.”
Liu warned that such actions would damage the U.S. business climate, saying, “Eroding Chinese companies’ confidence in investing here does no good to U.S. business interests. Excluding Chinese enterprises and the Chinese market will, in the end, hurt the U.S.’s own economic interests and international credibility.”
Impact on Chinese Business and the Shift to Hong Kong
If Chinese companies are forced to leave U.S. exchanges, many are expected to shift their listings to Hong Kong. Tom Chan Pak-lam, honorary president of the Institute of Securities Dealers, explained, “These companies may consider a secondary listing or a dual-primary listing in Hong Kong to raise funds, which will boost the initial public offering (IPO) market.” Chan added that when the delisting threat first appeared in 2020, companies like Alibaba, NetEase, and JD.com all made moves to list in Hong Kong as a backup.
Hong Kong Exchanges and Clearing (HKEX) has made it easier for U.S.-listed Chinese companies to transition. In 2022, HKEX lowered the minimum company value required for a secondary listing from HK$40 billion to HK$3 billion. In late 2024, it proposed reducing the public float requirement for IPOs, making it even easier for companies to shift from the U.S. to Hong Kong.
Zerlina Zeng, a senior credit analyst at CreditSights, said that delisting is “legally and technically possible,” and that it could happen quickly if President Trump chooses to issue another executive order. “The situation is still fluid and delisting could take place should the U.S.-China conflict escalate,” Zeng said.
She also noted that delisting might actually benefit Hong Kong in the long run by making it a more dominant market for Chinese stocks. Financial Secretary Paul Chan Mo-po shared that view, saying, “Given the current geopolitical landscape, Hong Kong is naturally becoming the preferred fundraising market for mainland companies.”
UBS strategist James Wang pointed out that many of China’s top firms already have a significant presence in Hong Kong. For companies with dual listings, the share of their total market value tied to Hong Kong has increased from 30 percent in 2021 to around 60 percent today. “The level of trading volume in Hong Kong has also picked up materially recently, with the velocity almost on par with the U.S.,” Wang said.
While the White House and the Securities and Exchange Commission have not issued formal comments, the pressure is clearly building. Trump has already raised tariffs on Chinese goods to 125 percent and issued multiple executive orders targeting China’s economy. Delisting Chinese companies appears to be a logical next step in a broader strategy to reduce America’s reliance on China and push Beijing toward more open financial practices.
Former SEC Chair Gary Gensler, who helped secure a 2022 audit agreement with China, warned that this conflict could drag on for years. “There is a nontrivial chance that we’re in a tariff-war quagmire for a long time with China,” Gensler said.
