The Trump administration and members of Congress pressured the New York Stock Exchange on Tuesday to remove China’s three major state-run telecommunications companies from the exchange.
The stock exchange late Monday had reversed its original plans, announced last week, to delist the companies to comply with an executive order from the administration aimed at stopping American investment in companies linked to the Chinese military.
Monday’s sudden reversal by the exchange sowed confusion and reflected the ongoing fighting within the Trump administration about how hard a line to take against China during President Trump’s final days in office. Treasury Secretary Steven Mnuchin has been pushing for greater accommodation for Chinese companies, while officials in the Department of Defense have argued that the companies in question must be delisted for national security reasons.
The Big Board said late on Monday that it had halted plans to delist the companies after consulting with the Treasury Department. The about-face came a week after the exchange said it would stop the trading of shares in China Unicom, China Telecom and China Mobile by Jan. 11 in response to a Trump administration executive order that blocked Americans from investing in companies tied to the Chinese military.
Speculation that the reversal was facilitated by Mr. Mnuchin drew backlash from some China hawks in Congress on Tuesday.
“The days of Wall Street and China benefiting at the expense of American workers and industry has to end,” Senator Marco Rubio, Republican of Florida, 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 Department of Defense also assailed the decision, issuing a statement to Bloomberg News on Tuesday that said keeping the companies on the exchange strengthens them and “promotes intelligence collection activities” by the Communist Party of China. Shortly after releasing the statement, however, the Pentagon retracted it. A Pentagon spokeswoman had no comment.
The Treasury Department had no comment about whether Mr. Mnuchin had encouraged the exchange to halt the delistings, and on Tuesday, as he was setting off on an international trip, Mr. Mnuchin wanted the exchange to move ahead with its plan to remove the companies. A senior administration official said Mr. Mnuchin called Stacey Cunningham, president of the N.Y.S.E. Group, on Tuesday to voice his objection to the decision not to delist.
A New York Stock Exchange spokesman had no comment on the call.
The scope of the president’s executive order has been a subject of debate. According to a person familiar with the matter, the stock exchange withdrew its plan to delist the Chinese companies after determining that the language was ambiguous and that it was unclear whether the companies were required to be removed.
If the Treasury Department clarifies that the order applies to those companies, the exchange will move forward with the delisting, this person said.
Another administration official said an interagency discussion was taking place on Tuesday evening about updating the order to make clear that it applied to the Chinese telecom companies.
The stock exchange’s statement on Monday did not give a reason for the decision, though it alluded to the ambiguity of the order and said the move came “in light of further consultation with relevant regulatory authorities.” The exchange said its regulatory department would continue to evaluate the applicability of the order to the telecommunications companies.
The delisting would have had little practical impact on the companies, which also have shares listed in Hong Kong and are state-owned. Still, the disappearance from the American exchange had hefty symbolic value for worsening economic ties between China and the United States.