Trump Signs Legislation to Kick Off Chinese Companies from US Markets
By: Ashwathy Nair
- Before Trump leaves office, the measure is served as another parting shot at Beijing.
- In May, after easily clearing the US Senate, the de-listing law won bipartisan support in the house.
- This move could impose real damage to Chinese companies.
On Friday, legislation was signed by President Donald Trump that could kick off Chinese companies from the U.S. markets unless their financial audits are reviewed by the American regulators, this move is likely to further intensify tensions between the two countries.
The measure could be affecting corporate giants such as Alibaba Group Holding Ltd. and Baidu Inc. this move serves as another parting shot at Beijing before Trump leaves the office in January.
It has been long railed against China by the president for what he calls unfair trading practices and has slapped tariffs on billions of dollars in imports. But this year, as he blamed Beijing for the global coronavirus pandemic, his rhetoric sharpened. Trump was widely criticized for the way he handled the situation at the time of the outbreak, which led to a central issue in his electoral loss to Joe Biden.
In May, after the U.S. Senate was easily cleared, the de-listing law won bipartisan support in the house early this month. While it is applied to any foreign company that the sponsors of the bill have stated their goal was focused to target China.
For years, American capital markets and dollar-based finance are being used by Chinese companies as a key funding component that helped in growing their businesses. While the measure is including a phase-in period, with penalties that are kicking in after three straight years of noncompliance, Chinese companies would be facing real damage that fails to meet the audit standards.
A lead sponsor of the new law, Republican Senator John Kennedy of Louisiana stated that “U.S. policy is allowing China flout rules that American companies play by, and it is dangerous”.
The signing of the law by Trump followed a surge of recent measures against China, including guidelines that would restrict travel visas for 92 million members of the Communist Party. Any of them with a 10-year visa will see a one-month decrease now.
The U.S. Department of Homeland Security stated that “shipments containing cotton and products of cotton that is originating from” the Xinjiang Production and Construction Corps, a military-affiliated agency that is one of China’s largest producers, will be placed by customs officers at American ports. This follows earlier U.S. action against the corporation that prohibits any trade with American businesses and citizens from being made.