The Trump administration and members of Congress lobbied the New York Stock Exchange on Tuesday to remove China’s three largest state-owned telecommunications companies from the stock exchange.
The stock exchange on Monday night reversed its original plans, announced last week, to remove companies from the list to comply with an executive order from the government that aims to prevent American investment in companies linked to the Chinese army.
Monday’s sudden reversal of the exchange sowed confusion and reflected the ongoing struggle within the Trump administration over how difficult a line is to be taken against China during President Trump’s final days in office. Treasury Secretary Steven Mnuchin has been pushing for more accommodation for Chinese companies, while Department of Defense officials argue that the companies in question should be removed from the list for national security reasons.
The Big Board said on Monday night that it had suspended plans to remove the companies after consulting the Treasury Department. The turnaround came a week after the exchange announced that it would stop trading in shares of China Unicom, China Telecom and China Mobile on Jan. 11 in response to an executive order from the Trump administration that prevented Americans from investing in companies linked to the Chinese military. .
Speculation that the reversal was facilitated by Mnuchin drew a reaction from some Chinese hawks in Congress on Tuesday.
“The days when Wall Street and China benefit at the expense of American workers and industry have to end,” Sen. Marco Rubio, Florida Republican, said on Twitter. He said such a move would be an “outrageous effort” to undermine President Trump’s executive order.
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The Defense Department also criticized the decision, issuing a statement to Bloomberg News on Tuesday that said keeping companies on the stock exchange strengthens them and “promotes intelligence gathering activities” by the Communist Party of China. Shortly after releasing the statement, however, the Pentagon withdrew it. A Pentagon spokeswoman did not comment.
The Treasury Department did not comment on whether Mnuchin had encouraged the exchange to halt removals, and on Tuesday, when he was leaving on an international trip, Mnuchin wanted the exchange to move forward with its plan to remove the companies. A senior administration official said Mnuchin called Stacey Cunningham, president of the NYSE Group, on Tuesday to express his objection to the decision not to remove the list.
A New York Stock Exchange spokesman did not comment on the call.
The scope of the president’s executive order has been the subject of debate. According to a person familiar with the matter, the stock exchange withdrew its plan to remove Chinese companies after determining that the language was ambiguous and it was unclear whether the companies should be removed.
If the Treasury clarifies that the order is valid for these companies, the exchange will continue the delisting, the person said.
Another government official said that an inter-agency discussion was taking place on Tuesday night about updating the order to make it clear that it applies to Chinese telecommunications companies.
The stock exchange’s statement on Monday gave no reason for the decision, although it alluded to the order’s ambiguity and said the move came “in the light of further consultations with the relevant regulatory authorities.” The exchange said its regulatory department will continue to assess the order’s applicability to telecommunications companies.
Going public would have had little practical impact on companies, which also have shares listed in Hong Kong and are state-owned. Even so, the disappearance of the American stock market had a symbolic value for the worsening of economic ties between China and the United States.