US treasury denies allegations that claimed that the administration was planning on blocking Chinese companies from listing on US stock exchanges amidst US-China trade war.
US-China trade war: Why?
US-China trade war had put the world on the edge as tensions grew between the world’s two national economies. The United States’ President Donald Trump has increased tariffs on China. Trump wants China to change its “unfair trade practices,” which, according to the US, are increasing their trade deficit.
US-China trade war: Current situation
Recently rumors spread that the United States was planning to block Chinese companies from listing on US stock exchanges. However, Treasury spokesperson Monica Crowley denied any such allegations. According to Monica, the US administration is not “contemplating” to deny Chinese companies access to US stock exchanges.
To decrease the trade deficit, the US administration has been seeking leverage in trade talks with the Chinese government. Recently both of these countries have imposed massive tariffs on the other countries goods. US administration is currently contemplating placing limitations on US investors’ portfolio flows into Chinese Firms.
Rumors about the US government delisting Chinese companies from stock exchanges had spread to the extent that caused panic in the markets. US-listed Chinese companies, including Baidu and Alibaba, saw a significant decline in their shares. Furthermore, the S&P also saw a 0.5 percent decline on Friday.
Reportedly the United States administration is trying to reduce US residents’ interaction with Chinese companies. The administration is hoping to achieve the goal through US pension funds and putting caps on the US managed funds’ exposure to Chinese Companies.
These discussions involve various administrative departments, including the US treasury and the National Economic Council.
US-China trade war: What’s next?
How things proceed from here onwards remains to be seen. Regardless the US administration seems hellbent against China. Reportedly US administration believes that interaction with Chinese companies exposes investors to their communist ideal and helps to finance their strength. Furthermore, the trade war has affected other markets, including pumping Bitcoin price earlier this year.
