U.S. Listed Chinese Stocks Surge as Trump Skips Tariff Threats

As U.S. President Donald Trump delivered his inauguration speech on January 21, 2025, investors breathed a sigh of relief as he refrained from immediate tariff hikes on Chinese imports. This absence of tariff threats, coupled with a focus on domestic issues, sparked a surge in U.S.-listed Chinese stocks. The S&P U.S. Listed China 50 index, which tracks the performance of the 50 largest Chinese companies listed on U.S. exchanges, closed higher, with all the top 10 stocks by weight in the index ending the day on an upbeat note.

Among the top performers, NIO and Pinduoduo led the gains, surging 16.7% and 11.96%, respectively. NIO, a multinational automobile manufacturer specializing in designing and developing electric vehicles, benefited from strong sales performance and expansion into new markets. Pinduoduo, a multinational commerce group that owns and operates a portfolio of businesses, saw gains driven by user growth and engagement, as well as expansion into new business segments.

Investors likely expected that Trump's second term would be more focused on domestic policies and less aggressive on trade issues compared to his first term. This expectation of a more moderate approach to U.S.-China trade relations contributed to the positive momentum in U.S.-listed Chinese stocks. However, the outcome of the U.S. presidential election could still influence the investment decisions of international investors, particularly those focusing on Chinese stocks listed on U.S. exchanges. A more protectionist trade policy, increased market volatility, and a more stringent regulatory environment could negatively impact the performance of these stocks.

In conclusion, the surge in U.S.-listed Chinese stocks following Trump's inauguration speech reflects investor sentiment and market expectations that the U.S. government would adopt a more conciliatory approach to U.S.-China trade relations. However, the U.S. presidential election outcome could still influence investment decisions, and investors should remain vigilant to potential changes in trade policies and market conditions.