Washington: US President Donald Trump signed into law on Friday the Holding Foreign Companies Accountable Act, which will delist Chinese companies from American stock exchanges.
The new trading law will affect nearly all Chinese firms listed on US exchanges, none of which now comply with the US auditing rules, reported South China Morning Post (SCMP).
The law will remove Chinese firms from American stock exchanges if they fail to comply with US auditing oversight rules within three years.
The law applies to all foreign companies listed on US stock but is being directed at Chinese firms, especially Huawei Technologies, TikTok, and WeChat.
Most other foreign companies on US exchanges are already in compliance, but Chinese law prohibits Chinese-based companies from doing so, reports SCMP.
Earlier this month, the US had passed an order to target the Chinese textile industry wherein; the new custom rule blocked imports of cotton textiles from China.
As per a congressional report by the US-China Economic and Security Review Commission, as of October 2, 217 Chinese firms with a combined market capitalisation of USD 2.2 trillion were listed on major US stock exchanges.
The Holding Foreign Companies Accountable Act was introduced in 2019 by Senator John Kennedy, Republican of Louisiana, and Senator Chris Van Hollen, Democrat of Maryland. It passed the Senate unanimously in May, and was overwhelmingly approved in the House on a voice vote on December 2, reported SCMP.
The trade relations between the two countries have deteriorated during Trump’s presidency and the US administration has used sanctions, trade blacklists and import bans to pressure Beijing and its flagship companies.