A group of Republican lawmakers is gearing up to announce legislation this week that would prohibit Americans from investing in overseas defense companies that have ties to the Chinese military.
The legislation will be unveiled by Republican Reps. Mike Gallagher of Wisconsin, Jim Banks of Indiana and Doug LaMalfa of California, according to a document seen by Reuters, and will require Treasury Secretary Steven T. Mnuchin to conduct a congressionally mandated report of foreign defense companies that have “substantial contracts with, ties to, or support from” China’s military.
“On one hand, Congress is asking taxpayers to help grow our military so we can compete with China. On the other hand, large U.S. investment funds are dumping U.S. dollars into China’s military industrial base,” Mr. Banks told the publication in a statement. “We need to end our cognitive dissonance and stop funding the rise of our chief global adversary.”
The measure would also mandate that American companies divest from the Chinese firms they are involved with within six months of the legislation’s passage.
The move comes amid soaring tensions between Beijing and Washington with the Trump administration accusing Beijing of mismanaging and lying about the coronavirus crisis after it originated in China. U.S. officials say Beijing has engaged in a disinformation campaign aimed at blaming the virus on Washington in a bid to undermine America’s image around the world.
President Trump on Friday stepped up his administration’s pushback to China and announced he is preparing to impose sanctions on Beijing over its announcement of a new state security law aimed at crushing dissent and democracy in Hong Kong.
The president made the announcement after the State Department declared that Washington officially assesses that Hong Kong no longer enjoys the legal and economic freedoms China promised it would tolerate when Great Britain gave the territory back to Beijing back in 1997.