While some on our side are curiously loath to say it — at least out loud — President Donald Trump’s tit-for-tat tariff war with China could escalate into a full-blown trade war. The ultimate result is unknowable.
As I’ve previously written, dictator Xi Jinping and his pals in Beijing are arguably at least as concerned with being seen by the world as kowtowing to the United States as they are with the potential long-term impact on the communist giant’s economy.
With that monkey wrench thrown into the works, Beijing’s next move, or any subsequent move in response to potential moves by Trump, is even more unknowable than it otherwise would have been.
Now, according to some experts (yeah, I know: some of us loathe “experts,” or at the least dismiss them out of hand when their views don’t align with ours), delisting Chinese stock from American exchanges could provide a potentially powerful tool to the U.S.
Moreover, many Chinese companies have failed to fully comply with negotiated agreements and to abide by U.S. securities laws, as reported by Just the News. Yet, as is often the case when America allows other nations to compete unfavorably with ours, Chinese corporations continue to reap the benefits provided by participation in American financial markets.
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Delisting Chinese securities from American exchanges would likely put pressure on Beijing by targeting the capital-raising capabilities of some of China’s largest corporations. Understand: just as is the case with the tariff war, the results of delisting Chinese stocks is unknowable, but unlike the tariff tit-for-tat, it would be a unilateral tool.
Was Obama to Blame?
Chinese firms have been able to access American exchanges since 2013, when then-President Barack Obama’s SEC (Securities and Exchange Commissio)n signed the first memorandum of understanding between U.S. securities regulators and the Chinese Ministry of Finance and the China Securities Regulatory Commission, granting significant concessions to Chinese companies that wanted to access to American financial markets.
Here’s more:
Under the deal, China agreed to allow the Public Company Accounting Oversight Board — which answers to the Securities and Exchange Commission — to gain “timely access” to certain audit documents of its homeland companies, but the Obama administration did not allow on-site auditing firms to conduct inspections.
That auditing requirement was nonetheless imposed on American corporations. Under the Sarbanes-Oxley Act, the board oversees the accounting firms that audit public companies to ensure transparency and protect investors.
Gordon Chang, a lawyer and China commentator who lived and worked in Shanghai and Hong Kong for decades, told Just the News:
[The] 2013 memorandum was unjustified. In other words, giving China access to our markets under terms which are more favorable than companies from any other country.
Who knew?
Moreover, who — and which country — most benefited by giving Chinese corporations virtually unfettered access to American stock exchanges, American investors and the United States, or the ChiComs in Beijing and Chinese corporations?
The question is rhetorical.
Editor’s Note: President Trump is leading America into the “Golden Age” as Democrats try desperately to stop it.
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