The House of Representatives on Wednesday passed a bill that could close US stock and money markets to Chinese firms.
The "Holding Foreign Companies Accountable Act" could be quickly placed on the desk of US President Donald Trump for final approval, since it was already passed by the Senate.
The measure introduced in 2019 by Louisiana Republican Senator John Kennedy would mandate that foreign companies listed on US stock exchanges comply with accounting requirements of the US Securities and Exchange Commission.
Many foreign companies already conform to the standard, but Chinese firms do not.
In addition, Chinese groups on the US Stock Exchange will have to disclose whether one or more of their board members are members of the Chinese Communist Party.
According to figures from a congressional commission, 217 Chinese companies were listed on US stock exchanges in early October, valued at a total of $2.2 trillion based on share prices.
A small number of those firms are also on the Asian markets and could fall back to these stock exchanges in the event of delisting in the United States.
One of the heavyweights on the list is e-commerce colossus Alibaba, which in 2014 had the biggest all-time initial public offering on the New York Stock Exchange, raising $25 billion.
Its rival JD.com is listed on the Nasdaq, an index rich with technological firms, and also on a Hong Kong exchange.
The bill passed by Congress is part of a commercial and political duel between Washington and Beijing, and takes aim at opaque accounting practices used by Chinese firms listing shares for trade on US exchanges.
The SEC has already crafted a proposal similar to the measure that passed the House of Representatives on Wednesday.
In November, the SEC had already formulated a proposal similar to the text adopted Wednesday by the House.