JPMorgan Chase and Bank of America (BofA) should pull out of the IPO of Chinese battery giant CATL, a U.S. Republican lawmaker said on Thursday.

In letters to JPMorgan CEO James Dimon and BofA CEO Brian Moynihan, John Moolenaar, chairman of the U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, said the two banks had exposed themselves and their U.S. investors to “significant regulatory, financial and reputational risks" by underwriting CATL's IPO.

CATL announced Feb. 11 that it had hired China International Capital Corporation Hong Kong Securities Ltd., China Securities (International) Corporate Finance Company Limited, J.P. Morgan Securities (Asia Pacific) Limited and Merrill Lynch (Asia Pacific) Limited as sponsors and overall coordinators for its Hong Kong IPO.

The two letters highlight the blacklisting of CATL by the U.S. Department of Defense in January this year, citing the company's alleged links with the Chinese military.

In January, the U.S. Department of Defense placed Tencent, CATL, SenseTime, CloudWalk Technology, and a number of other Chinese tech companies on the list of "Entities Identified as Chinese Military Companies," also known as the CMC list.

Companies on the blacklist will not be allowed to become suppliers to the U.S. Department of Defense.

CATL said at the time that it was "not engaged in any military-related activities".

U.S. President Donald Trump's "America First Investment Policy" memo is also aimed at preventing Wall Street from steering U.S. retail investors to fund CATL's IPO, Moolenaar said in his letters.

CATL is the main supplier of lithium iron phosphate batteries to Tesla's Shanghai factory, which is the largest U.S. automaker.

Moolenaar also said in the letters that if the two banks are unwilling to immediately withdraw from the deal, the committee will require them to answer 21 questions in detail about their risk assessments, compliance protocols and possible violations of USA law.

The intervention comes at a time when Hong Kong's budding stock-selling rally is threatened by uncertainty over the U.S.-China trade war.

Since Trump's April 2 announcement of tariff hikes, Hong Kong's benchmark index has faltered in its stunning rally.

Hong Kong's Hang Seng Index is still up 6.66% so far this year after a big rally and then retreating.

JPMorgan ranked fifth in Bloomberg's ranking of Asian equities and equity-linked trading activity this year, while BofA ranked 11th.

In late March, JPMorgan participated in Xiaomi's $5.5 billion Hong Kong share placement along with Goldman Sachs and CICC.

Also in March, both JPMorgan and BofA participated in Baidu's $2 billion offering of bonds exchangeable into the Hong Kong-listed shares of Trip.com Group.

$11.2 billion was raised in Hong Kong IPOs last year, nearly 90% higher than in 2023, according to data compiled by Bloomberg.

CATL is likely to raise at least $5 billion through its Hong Kong IPO, according to Bloomberg.

CATL's plan for a second listing in Hong Kong has been progressing well since its official announcement at the end of December last year.

Not long ago there was news that CATL has passed the Hong Kong Stock Exchange hearing, and may be listed in May at the earliest.

However, CATL disclosed in an announcement on April 11 that the Listing Committee of The Stock Exchange of Hong Kong Limited held a listing hearing on April 10, 2025 to consider its IPO application.

It said, "The issuance and listing of the Company's [shares] is subject to the final approval of the Securities and Futures Commission of Hong Kong and the Stock Exchange of Hong Kong and other relevant regulatory bodies and stock exchanges, and there is still uncertainty in this matter."

CATL's Shenzhen-listed shares were down 0.6% at 224.64 yuan per share as of 2:33 p.m. Beijing time Friday.

JPMorgan and BofA both saw year-on-year declines in equity underwriting revenue in the first quarter of this year, their earnings results showed.

Uncertainty over conflicting tariffs is dragging down equity sales activity in the U.S. and Europe, where most IPO plans have been put on hold amid market turmoil.

Before sending letters of urging to the CEOs of JPMorgan and BofA, the Moolenaar-led committee also released a report Wednesday calling DeepSeek a "profound threat" to U.S. national security and urging Nvidia to turn over information about its sales of chips to the Chinese AI startup.