Yum China Holdings, Inc. (YUMC) saw its stock plummet by 5.08% during intraday trading on Thursday, as investors reacted to news that the Trump administration is considering delisting Chinese companies from U.S. stock exchanges. This move, seen as part of the escalating U.S.-China trade war, has sent shockwaves through the market, particularly affecting Chinese stocks listed in the United States.

The threat of delisting emerged when Treasury Secretary Scott Bessent hinted at the possibility in a recent television interview, stating that "everything is on the table" when asked about kicking Chinese companies off the New York Stock Exchange and Nasdaq. This potential action is rooted in the Holding Foreign Companies Accountable Act, signed by President Trump in 2020, which has already led to the delisting of three Chinese telecom companies in early 2021.

Yum China, which operates popular fast-food chains like KFC and Pizza Hut in China, is among the Chinese companies widely held by U.S. investors and potentially at risk. Other major Chinese stocks that could be affected include tech giants Alibaba, Baidu, PDD Holdings, and NetEase. The news has sparked concerns among investors, with some analysts estimating that U.S. investors might need to liquidate about $800 billion of ADR holdings in Chinese companies if the delistings were to occur.

While some experts, like David Harden of Summit Global Investments, believe that actual delistings are unlikely, the mere threat has been enough to rattle markets. The uncertainty surrounding U.S.-China relations and the potential for further retaliatory measures continues to create volatility for Chinese stocks traded on U.S. exchanges, as evidenced by Yum China's significant drop today.