"We must take firm, orderly action to end the Chinese practice of flouting American transparency requirements without negatively affecting American investors and financial markets," Trump wrote.
The statements mark the latest flashpoint in U.S.-China relations at a time of escalating tensions between the world's two largest economies over trade, the coronavirus pandemic and Hong Kong.
"American investors should not be subjected to hidden and undue risks associated with companies that do not abide by the same rules as U.S. firms," Pompeo said in his statement. "Nasdaq’s action should serve as a model for other exchanges in the United States, and around the world."
"I applaud Nasdaq for requiring auditing firms to ensure all listed companies comply with international reporting and inspection standards," Pompeo added.
Nasdaq Inc took action last month and tightened listing rules, in a bid to curb initial public offerings of Chinese companies closely held by insiders and with opaque accounting.
Nasdaq Chief Executive Adena Friedman said on Thursday addressing the overseas accounting issues is a matter for the U.S. Securities and Exchange Commission (SEC).
The exchange's tightening of listing standards came after Chinese coffeehouse chain Luckin Coffee Inc, which had a U.S. IPO in early 2019, announced that an internal investigation showed its chief operating officer and other employees fabricated sales deals.
Trump said last week his administration would begin the process of eliminating special U.S. treatment for Hong Kong to punish China, saying Beijing's move to impose new national security legislation meant the territory no longer warranted U.S. economic privileges.
He also said he was instructing a presidential working group to study the differing practices of Chinese companies listed on the U.S. financial markets, with the goal of protecting American investors.
"The real issue is the lack of transparency and the lack of disclosure to the American investors," Keith Krach, undersecretary for economic growth, energy and the environment at the U.S. State Department, told Reuters on Wednesday.
"No country should be allowed to lie to the American investors to create an unfair advantage, especially when operating in American markets," Krach said.
Many U.S.-listed Chinese firms will likely list on the Hong Kong exchange this year, in part because of U.S. political pressure, the head of the exchange said Thursday.
The SEC has been locked in a decade-long struggle with the Chinese government to inspect audits of U.S.-listed Chinese companies.
In April, SEC chief Jay Clayton, warned investors against putting money into Chinese companies due to problems with disclosures.
A senior U.S. official said he hoped the SEC would review a memorandum of understanding signed with China in 2013, allowing Chinese companies to withhold information if their local laws forbid them from sharing it.
"That waiver should probably be reviewed at this point in time as to whether it is still appropriate and if not be rescinded," he said, adding that the decision was up to the SEC.
(Reporting by Humeyra Pamuk; additional reporting by Echo Wang and John McCrank; Editing by Chris Sanders, Edward Tobin, Nick Zieminski and Tom Brown) ((email@example.com; +1 202 3105694; Reuters Messaging: Twitter: @humeyra_pamuk))