US Steps Up Confrontation With Chinese Regime Amid Pandemic

May 14, 2020 Updated: May 20, 2020

News Analysis

The Chinese regime’s mishandling and disinformation surrounding the pandemic has re-escalated US-China tensions, while beaming a spotlight on the Trump administration’s ongoing campaign to counter Beijing in areas from trade to national security.

The pandemic’s disruption of global supply chains has hastened an administration initiative to reduce manufacturing dependence on China. Meanwhile, a raft of other measures across U.S. government agencies combating security and other threats posed by the regime are also coming to the fore.

President Donald Trump has taken a “whole-of-America approach” to tackling the challenge of the Chinese Communist Party, state department spokesperson Morgan Ortagus told The Epoch Times in a recent interview.

“This pandemic has highlighted just how correct, I think, President Trump has been since he began campaigning for the office in 2015 about the need to protect our borders, to bring crucial manufacturing home, and … importantly for America, to have reciprocal relationships around the world, to have an even playing field,” Ortagus said.

“And that’s what we’re calling for in our relationship with China—whether it’s in trade, or whether it’s working on this pandemic, or national security issues.”

The president and senior administration officials have stepped up their criticism of the regime’s coverup of the virus outbreak, while the administration conducts an investigation into the virus’s origins. The president has said that tariffs would be “the ultimate punishment” for Beijing, although White House officials have indicated they are not considering punitive measures against the regime.

“There are many things we could do,” Trump told Fox Business on May 14. “We could cut off the whole relationship.”

He added: “Now, if you did, what would happen? You’d save $500 billion if you cut off the whole relationship,” referring to the United States’ trade deficit with China.

Hardening Stance

Washington has in recent years taken a tough line on China issues. But the pandemic has “supercharged” efforts in certain areas, Walter Lohman, director of the Asian Studies Center at Washington-based think tank Heritage Foundation, told The Epoch Times.

The pandemic has put issues surrounding America’s supply chain vulnerability—particularly in pharmaceuticals and medical supplies—“front and center,” he said. The administration is currently looking for ways to spur companies to move their sourcing and manufacturing away from China, according to Reuters.

White House economic advisor Larry Kudlow in April floated the idea of helping U.S. companies relocate from China by allowing them to deduct from their tax returns the entire cost of capital spending associated with the move.

On the trade front, Trump last week said he was “very torn” about the phase-one U.S.-China trade deal reached in January. He told Fox News that the pandemic has changed his views on the matter since the deal’s signing, adding that he was “having a very hard time with China.”

Under the deal, the communist regime agreed to buy an additional $200 billion of American goods and services, including farm goods, over the next two years. While both sides during a recent phone call agreed to meet their obligations under the agreement, trade data for the first quarter shows that China is far behind the pace necessary to meet its purchase target.

Earlier this week, the administration directed the Federal Retirement Thrift Investment Board (FRTIB)—the independent body that oversees the pension fund for federal employees and military members—to halt plans to invest in Chinese companies that pose national security and human rights concerns.

The Board in 2017 decided to shift its investment strategy for its $40 billion international fund to track an index that includes China-based stocks of companies under scrutiny in Washington. Among the companies are Hangzhou Hikvision Digital Technology, which was placed on a U.S. trade blacklist last year because the company’s technology was being used for the repression of Uyghur Muslims in China’s western Xinjiang region, as well as aircraft and avionics company Aviation Industry Corporation of China, which supplies weapons to China’s military.

In a letter from Kudlow and National Security Adviser Robert O’Brien to Labor Secretary Eugene Scalia on Monday expressing opposition to the investment move, the officials cited the “significant and unnecessary economic risk” of investing in Chinese companies, noting “the possibility of future sanctions will result from the culpable actions of the Chinese government” with respect to the spread of the virus.

The move was due to take effect later this year, but the FRTIB announced on May 13 it would indefinitely delay those plans.

The administration’s pressure in this instance signaled a “warning shot” to the regime, Stephen Moore, an economist and former Trump campaign adviser, told NTD, an affiliate of The Epoch Times.

“There’s a real sense that the United States has to be more punitive with China because of what has happened with COVID … that has been so devastating to the United States,” Moore said.

Trump also indicated on May 14 that his administration is looking “very strongly” at requiring Chinese companies listed on U.S. stock exchanges to comply with U.S. accounting rules. Currently, the regime blocks U.S. regulators from examining the audit papers of Chinese companies, saying they contain “state secrets.”

He noted, however, there would be drawbacks with this approach.

“Let’s say we do that right. So what are they going to do? They’re going to move their listing to London or some place else,” Trump said.

Tech Focus

Lohman said he expects the administration will continue to tighten rules concerning the transfer of sensitive technology to China.

The Department of Commerce recently released rules to make it tougher for U.S. companies to export certain types of advanced technology to China that might aid its military.

It now requires U.S. companies to obtain licenses to sell certain items—including semiconductor production equipment and sensors—to companies in China that support the Chinese military, even if the items are for civilian use.

Meanwhile, Chinese telecom and technology firms remain under intense scrutiny from the United States over their national security risks. Since last May, a raft of Chinese companies, including Chinese telecom giant Huawei, were blacklisted from doing business with American companies due to security concerns or abuses of human rights.

The Federal Communications Commission (FCC) last month commenced steps to bar three Chinese state-controlled telecom companies from operating in the United States, citing security risks stemming from the concern that they are subject to influence from the Chinese Communist Party (CCP).

FCC Commissioner Brendan Carr recently told The Epoch Times the agency is conducting a review of all Chinese companies operating in the country.

Congressional Push

Separately, Congress has been increasingly vocal in taking a stand against the regime, with a mounting campaign spearheaded by Republican lawmakers to hold Beijing accountable for the global health crisis.

A range of bills have been introduced to do this, including legislation that would strip China of the protection of sovereign immunity so it could be sued in U.S. courts, imposing sanctions on the regime, and reducing supply chain dependence on China.

Lawmakers have also put forward initiatives targeting Chinese tech companies, including a plan to ban federal employees from using tech platforms under the influence of the CCP, such as Tencent, Alibaba, and Baidu.

Meanwhile, the regime’s infiltration of college campuses has come under increased scrutiny.

Ranking Republicans from seven House committees in early May pressed Secretary of Education Betsy DeVos for information on Beijing’s investment in American colleges to further its strategic and propaganda goals. The lawmakers noted that Beijing-funded culture programs such as Confucius Institutes serve as a vehicle to promote Beijing propaganda to American students, as well as “a gathering ground for Chinese intelligence agencies.”

Last week House Republicans launched a new task force to combat threats from the CCP. The 15-member “China Task Force” expects to release a report later this year covering issues such as Beijing’s influence operations in American academic institutions, its efforts to gain a technological advantage over the United States, and its handling of the initial outbreak.

“Their coronavirus coverup is yet another wake up call to the evolving threat they pose to the world,” said House Foreign Affairs Committee Chairman Rep. Michael McCaul (R-Texas), who heads the task force.

“Not only do we have to hold the CCP accountable for their role in the spread of coronavirus, the United States must take bold action to address the CCP’s malign agenda and better compete with China on the world stage,” he said.

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