The US-China fight isn’t going away. This proves it

This much has been made clear in recent days: The US-China fight that’s rattled markets and forced companies to rethink their global supply chains won’t just be a feature of the Trump era.

What’s happening: The US House of Representatives on Wednesday passed a bill that could kick several Chinese firms off American stock exchanges. It was already green-lit by the Senate, which means it now just needs President Donald Trump’s signature to become law.

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.

Sensing that scrutiny is growing, Chinese companies have been readying contingency plans. Earlier this year, gaming company NetEase and e-commerce firm JD.com, both of which trade in New York, acknowledged the tensions as they announced secondary listings on the Hong Kong stock exchange. Other companies that could be affected include Alibaba and China Telecom.

That’s not all: The vote came shortly after the New York Times published an interview with Joe Biden in which the US president-elect indicated that he doesn’t plan to play nice with China, telling columnist Thomas Friedman that he wouldn’t act immediately to roll back the 25% tariffs that Trump imposed on roughly half of China’s exports to the United States.

“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?

Discussions about additional stimulus spending in the United States have been locked in partisan gridlock for most of the year. This week, however, there have been signs of movement on more coronavirus relief measures.

The latest: House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer said Wednesday that “in the spirit of compromise,” the bipartisan $908 billion package unveiled earlier this week should be “used as the basis” for future talks.

“Of course, we and others will offer improvements, but the need to act is immediate and we believe that with good-faith negotiations we could come to an agreement,” they said.

Senate Majority Leader Mitch McConnell has thrown cold water on the proposal. But Goldman Sachs told clients it sees the announcement from Pelosi and Schumer as a step forward.

“Democratic leaders appear to have yielded on their insistence on a multi-trillion dollar fiscal stimulus package, raising the odds that a deal can be reached before the end of the year,” strategists including chief US political economist Alec Phillips said in a research note.

Many sticking points remain, however — including what will actually be included in the bill.

According to Phillips, Democrats are likely to demand some fiscal aid for states, while another round of stimulus checks looks unlikely given the price tag, which “would crowd out many other competing priorities.” Goldman Sachs expects the biggest part of the package to consist of assistance for small businesses.

There’s also the question of whether Trump would sign a bill if it reaches his desk.

UPS struggles to cope with holiday shopping boom

UPS is placing shipping limits on some of its largest retailers, a sign that online shopping is straining its delivery network during a holiday season where many people are stuck at home.

The company didn’t provide names of the retailers that would be affected, but said the new restrictions would take effect this week, my CNN Business colleague Jazmin Goodwin reports. The Wall Street Journal reports that Gap and Nike are among those subject to the new rules.

“We expect the majority of these orders to meet estimated delivery dates and are communicating with consumers any changes in delivery,” a Nike spokesperson said.

Big picture: Skyrocketing online shopping over the Thanksgiving holiday was a taste of what’s to come. Cyber Monday produced $10.8 billion in sales, a 15% bump from last year and the biggest online shopping day in history, per Adobe Analytics.

UPS added 20 new facilities and 14 additional aircraft for the peak season. It also expanded its weekend operations and the speed of its ground delivery. Other shipping services such as FedEx and USPS have increased pricing premiums for the holidays, while hiring thousands of temporary workers to handle shipments.

Amazon, meanwhile, has avoided significant shipping troubles by relying on its own delivery service and drivers. This past weekend, Amazon reported bringing in nearly $5 billion between Black Friday and Cyber Monday, a 60% increase from last year.

Up next

Dollar General and Kroger report earnings before US markets open. Smith & Wesson and Ulta Beauty follow after the close.

Also today:

• OPEC and Russia are due to make a tough call on whether to start pumping more crude.
• Initial US jobless claims for last week arrive at 8:30 a.m. ET. An additional 775,000 claims are expected, down just slightly from the previous week.

Coming tomorrow: Investors will turn their attention to the official US jobs report for November, which is expected to show the weakest level of employment growth since the Covid-19 recovery started.