Big Chinese stocks like Alibaba and Baidu that have tanked on the escalating U.S.-China trade war could be delisted from American stock exchanges by President Donald Trump.

Wall Street considers it the nuclear option.

Treasury Secretary Scott Bessent hinted at delisting in a television interview last week.

“Everything is on the table,” Bessent told Fox Business when he was asked whether Trump would consider kicking off Chinese companies from the New York Stock Exchange and Nasdaq. The companies trade American depositary receipts, or ADRs.

The Treasury Department, the New York Stock Exchange, and Nasdaq didn’t immediately respond to Barron’s request for comment.

Trump can delist companies under the Holding Foreign Companies Accountable Act, which he signed in 2020 during his first term. In early 2021, before Trump left the White House, the New York Stock Exchange delisted three Chinese companies—China Telecom, China Mobile, and China Unicom—to comply with the law.

Strategists at Goldman Sachs, however, describe delisting as “an extreme scenario.”

The Goldman strategists, based in Asia, estimate U.S. investors would need to liquidate about $800 billion of ADR holdings in Chinese companies if Trump or the exchanges banned the listings.

Besides Alibaba and Baidu, other Chinese companies widely held are Temu owner PDD Holdings, NetEase, Li Auto and Yum China.

Because of trade tensions, the iShares MSCI China exchange-traded fund and KraneShares CSI China Internet ETF have both dropped in the past month—16% and 20%, respectively. Both funds, though, are up for the year: iShares, 4.9%, and KraneShares, 3.2%.

Still, China could drive the ETFs down even more depending on how it retaliates.

If Beijing orders Chinese investors to pull their money from U.S. exchanges, the number is enormous: $370 billion, roughly the GDP of Denmark or Egypt.

Investment expert David Harden believes neither China nor the U.S. will ban stockholdings.

“I don’t see China stocks being delisted,” the chief investment officer for Summit Global Investments told Barron’s. “The difficulty in doing that is because you still want foreign companies to think of America as being home of the free.”

Even so, Harden thinks investors should “be wary of taking new positions” in Chinese stocks but shouldn’t necessarily sell their Chinese holdings either.

Not every Wall Streeter is confident that the threats are idle.

Analysts at UBS aren’t ruling anything out. They can imagine a scenario where delistings force institutional investors to dump their holdings. The stocks probably would move to an over-the counter exchange, where they would have lower liquidity and higher volatility. The damage would be done.

“Delisting represents a significant downside risk due to forced selling from institutional holders,” they wrote in a report last week.

All this talk—delistings, tariffs, selloffs—is enough to rattle even the calmest minds.

Think about Harden’s warning about putting new money into Chinese ADRs—at least until it’s clear whether delisting is a real worry or just an empty threat.