President Trump signed an order on Thursday barring U.S. investments in Chinese companies owned or controlled by China’s military, as he tees up a series of executive actions on school choice, immigration and other conservative priorities before Jan. 20 that would force presumptive President-elect Joseph R. Biden to work to reverse next year.
The order, which could impact some of China’s biggest companies, was necessary because Beijing is “increasingly exploiting United States capital” to develop its military and intelligence capabilities, Mr. Trump said.
“To protect the United States homeland and the American people, I hereby declare a national emergency with respect to this threat,” the president said.
It was the first of what are likely to be many executive actions before the expected inauguration in January of Mr. Biden, whom Mr. Trump has accused of being soft on China.
At the same time, Mr. Biden is planning to rescind a slew of Mr. Trump’s executive orders starting on Day One of his administration.
The Democrat aims to issue executive actions to end the president’s restrictions on federal funding of Planned Parenthood, reinstate the U.S. in the Paris climate accord and stop the withdrawal from the World Health Organization, revive the Obama-era Deferred Action for Childhood Arrivals program and repeal Mr. Trump’s travel ban on mostly Muslim countries.
The rapid flip-flopping of priorities — assuming that Mr. Biden is certified the winner of the election — shows the limits of governing by executive action instead of enacting legislation.
“What’s been done by executive order can be undone by executive order — that’s low-hanging fruit,” said Tony Payan, director of the Center for the U.S. and Mexico at Rice University’s Baker Institute for Public Policy.
Although Mr. Trump hasn’t conceded the election, the White House is gathering proposals that the president can achieve with the stroke of his pen in the next 70 days. For example, conservative economist Stephen Moore said he’s recommended to the West Wing that the president authorize that billions in unspent COVID relief money could be spent on school vouchers for parents of students whose school districts aren’t providing regular in-person instruction.
“Arizona has money left over, Utah has money left over that they could use for the [voucher] purpose only if a school system is not fully open,” he said. “That’s one the president is very much considering.”
Mr. Moore also has recommended an order that would index capital gains for inflation, which would lower the tax bill mainly for wealthier investors.
The White House didn’t confirm any other pending actions on Thursday.
“Since taking office, President Trump has never shied away from using his lawful executive authority to advance bold policies and fulfill the promises he made to the American people, but I won’t speculate or comment on potential executive action,” said deputy press secretary Judd Deere.
Mr. Trump had issued 192 executive orders through last week, according to the American Presidency Project at the University of California at Santa Barbara. President Obama issued 147 executive orders in his first term.
Mr. Biden is gearing up to rescind several of Mr. Trump’s defining actions, many of which were aimed at erasing Obama administration policies. Progressives on Thursday urged Mr. Biden to use his executive pen liberally, saying it will help Democrats overcome gains made by Republicans in Congress last week.
“We have to encourage Joe Biden and Kamala Harris to use executive orders and rule changes aggressively early in many areas,” said Rep. Mark Pocan, Wisconsin Democrat and co-chair of the Congressional Progressive Caucus, said at a conference. “That is going to be our single best way to be able to get around any obstructionism or tight vote margins.”
On immigration, Mr. Biden plans to reinstate the DACA program that allows “Dreamers,” who were brought to the U.S. illegally as children, to remain in the country. The Supreme Court ruled last summer that the Trump administration didn’t go about ending the program correctly.
“I think a Biden administration will not challenge DACA any longer,” Mr. Payan said.
He said Mr. Biden also is likely to take action to reverse the administration’s “public charge” rule, which allowed officials to deny green cards to immigrants who might need food stamps or housing vouchers. A federal judge also ordered the administration this month to vacate the policy.
“That can be rolled back very quickly,” Mr. Payan said.
Mr. Biden also is expected to roll back the Trump administration’s Medicaid work requirements and block grants.
Mr. Trump is widely expected to issue more pardons, which cannot be reversed. Among the possible recipients are former national security adviser Michael Flynn and former campaign manager Paul Manafort.
The president’s order on U.S. investments in 31 Chinese companies takes effect on Jan. 11. It gives investors until November 2021 to divest from any Chinese securities in those companies.
Two companies, China Mobile Communications and China Telecommunications Corp., trade on U.S. exchanges. The order also targets telecom giant Huawei.
Peter Navarro, White House director of trade and manufacturing policy, said the order is designed to prevent the use of American capital to finance “Chinese communist weapons literally aimed at killing Americans and driving the U.S. military out of Asia.”
“This strong action by President Trump puts a stop to that Wall Street insanity,” he told reporters.
The order provides what Mr. Navarro said was a “decent interval” for American investors to unwind stakes in 31 Chinese companies identified earlier this year by the Pentagon as linked to the Chinese military.
The Chinese companies are involved in U.S. stock and bond markets and also other financial investments such as the Morgan Stanley Capital International, or MSCI, an investment firm that provides stock indexes.
For example, Mr. Navarro said the order blocks American investment in the Aviation Industry Corp. of China that has built China’s J-20 stealth fighter from stolen technology from the F-35 and F-22 frontline fighter.
Other companies like Huawei Technologies and the video company Hikvision were described by Mr. Navarro as “tips of the spear for battlefield [artificial intelligence] for the Chinese military.
Hikvision also has been linked to mass surveillance of ethnic Uighurs in China who have been placed in concentration camps.
Other Chinese firms hit by the order include China Shipbuilding that has been producing naval warfare systems and China South Industries and Norinco that are linked to firearms, tanks and armored vehicles.
Chinese missile manufacturers and companies engaged in telecommunications cables also will be affected.
“What you have here is a situation where in typical fashion Wall Street facilitates the flow of American capital to support Chinese militarization,” Mr. Navarro said. “What this executive order does is put a stop to that in a way which provides American investors with effectively an exit strategy.”
In addition to the 31 companies, the order also hits subsidiaries of the companies, such as AVIC’s 20 subsidiaries.
Mr. Navarro said the total investment in U.S. and foreign markets by the Chinese military-linked companies is at least $500 billion.
“This is a sweeping order designed to choke off American capital to Chinese militarization,” he said
The president said China’s development of its military and intelligence with U.S. capital allows Beijing “to directly threaten the United States homeland and United States forces overseas, including by developing and deploying weapons of mass destruction, advanced conventional weapons, and malicious cyber-enabled actions against the United States and its people.”
He said Beijing compels civilian Chinese companies to support its military and intelligence activities.
“At the same time, those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital,” he said. “In that way, the [People’s Republic of China] exploits United States investors to finance the development and modernization of its military.”