The legislation would prevent companies that refuse to open their books to US accounting regulators from trading on Wall Street. Though it would apply to any foreign company, the focus on China is obvious.
Beijing has resisted such audits, and requires companies that trade abroad to hold key paperwork in mainland China, where they cannot be examined by overseas agencies, my CNN Business colleague Jill Disis reports.
“US policy is letting China flout rules that American companies play by, and it’s dangerous,” Sen. John Kennedy, a Louisiana Republican who is one of the bill’s initial sponsors, said in a statement. “Today, the House joined the Senate in rejecting a toxic status quo.”
Beijing isn’t pleased. “We firmly oppose politicizing securities regulation,” Ministry of Foreign Affairs spokesperson Hua Chunying said when asked about the vote.
“I’m not going to make any immediate moves, and the same applies to the tariffs,” Biden said. “I’m not going to prejudice my options.”
Step back: The Biden administration may work more closely with US allies when engaging with China. Still, it’s evident that tensions with the world’s second largest economy will remain high.
Investor insight: The sense among investors is that Biden is a steadier hand than Trump, which makes it likelier that the conflict between Beijing and Washington can avoid a rapid escalation over the next four years.
“We did not expect an immediate rollback of tariffs, but we expect a more conciliatory and multilateral approach from the incoming administration, reducing a major source of market instability during the Trump presidency,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
But they remain on guard for changes that could affect global business and capital flows, like the legislation now on Trump’s desk.
Are stimulus discussions finally going somewhere?