Friday, July 31, 2020

Trump Gets Super Aggressive Against Chinese Companies Listed on US Exchanges Plans to Use the Plunge Protection Team

This is absolutely insane and will lower the standing of US stock exchanges in the world.

The international law firm Holland & Knight reports that President Trump has issued a memorandum requesting the President's Working Group on Financial Markets (aka The Plunge Protection Team) to study ways to "protect" U.S. investors from "significant risks" from Chinese companies listed on the U.S. stock exchanges.

Holland & Knight add:
The series of proposed rules, laws, U.S. government actions and the existing tensions between the two countries have led a number of U.S.-listed Chinese companies to seek a secondary listing in Hong Kong. It is expected that this trend will continue until after all the rules are finalized and U.S.-listed Chinese companies make a determination as to whether it is advisable to remain in the U.S. market.

The Trump Administration's foreign policy toward China remains hostile and fast moving, exposing companies and organizations engaging in U.S.-China businesses to significant uncertainty.
The unseen ramifications from this memorandum could be huge. Investment bankers may move significant personnel and financial dealings to Hong Kong to ensure that Chinese clients are not lost.

Further, it could limit the ability of U.S. investors to get onboard investment opportunities in China which could be the most significant globally over the next 10 years.

In addition, this raises tension at the government level between the U.S. and China for no good reason.

This is also an example of a government body formed for one purpose that has been shifted to be used in a different and more expansive role.


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