Yum China Holdings, Inc. (YUMC) saw its stock price plummet by 5.08% during Thursday's trading session, as concerns over potential delisting of Chinese companies from U.S. stock exchanges intensified. The sharp decline comes amid escalating U.S.-China trade tensions and reports that the Trump administration is considering the removal of Chinese stocks from American exchanges.

The possibility of delisting, described by some Wall Street analysts as the "nuclear option," was hinted at by Treasury Secretary Scott Bessent in a recent television interview. Under the Holding Foreign Companies Accountable Act, signed by President Trump in 2020, the administration has the authority to delist foreign companies. Yum China, along with other major Chinese firms such as Alibaba, Baidu, and PDD Holdings, is among the companies that could be affected if such measures are implemented.

While some experts, including Goldman Sachs strategists, view delisting as "an extreme scenario," the mere possibility has sent shockwaves through the market. The potential move could force U.S. investors to liquidate approximately $800 billion worth of American Depositary Receipt (ADR) holdings in Chinese companies. As uncertainty looms, investors are advised to exercise caution when considering new positions in Chinese stocks, although opinions vary on whether current holdings should be maintained or sold.