There are efforts in the White House and Congress to stop big investor pools of money, such as federal retirement plans, from investing in Chinese companies, such as those under U.S. sanctions, are building weapons for the Chinese military, or will be used to surveil the Uighur community. The Pentagon has compiled a list of companies with ties to China’s military, including two groups listed on the New York Stock Exchange, as part of an effort to make it harder for China to secure U.S. investment and sensitive technologies. President Trump stopped the main U.S. government pension fund, which holds the retirement money for military personnel past and present, from investing in Chinese companies that may be building weapons for the Chinese military. The twenty companies spotlighted by the Pentagon include Huawei and Hikvision, which supplies surveillance technology to the detention camps for the Muslim Uighurs. A Hikvision representative has stated that “all our business is required to align with the company’s compliance policy.”44 The fund had earmarked 10 percent of its $600 billion in assets under management (AUM) to invest in the Morgan Stanley Capital International index, but the president stopped it because of the inclusion of the Chinese companies in that index. White House economic adviser Larry Kudlow and National Security Adviser Robert C. O’Brien then sent a letter to the U.S. Railroad Retirement Board warning its managers against investing in Chinese companies on behalf of railroad workers’ retirement benefits, saying the trust it oversees is exposing investors to undue economic risk and endangering U.S. national security because it invests in certain Chinese companies. James spoke to Kudlow a few days later. “I certainly don’t want American investors to invest in the Chinese military,” Kudlow said.
The letter, dated July 7, 2020, was the latest action the Trump administration has taken to curtail U.S. investment in China, specifically companies building weapons for the Chinese military. Those companies, by the way, do not follow the same accounting rules as American companies, something Florida senator Marco Rubio and Senator John Kennedy pushed to change. Kennedy introduced a bill, cosponsored by Senator Chris Van Hollen (D-Md.) and Senator Kevin Cramer (R-N.D.), to force Chinese companies to follow the accounting rules of this country or be prevented from trading on U.S. exchanges. The bill, which passed in the Senate, would give the Chinese companies three years to comply.
When we spoke with President Trump in July, after more than 100,000 Americans had died of coronavirus and the country was facing a severe contraction with millions of Americans out of work, the president was way beyond the niceties displayed at that Mar-a-Lago dinner three years earlier.
“It’s a hostile country. It’s a country that’s taken advantage of the U.S. for many years,” President Trump said of China. He was speaking to us on the telephone in July 2020. Chinese buyers had begun dramatically increasing their purchases of U.S. corn and soybeans, but Trump wasn’t celebrating. He suspected that recent attempts to fulfill the promises of his “Phase One” trade deal signed with China in January are only occurring because “they know that I’m on the verge of saying, ‘Go f——yourself and I don’t want your G-damn trade deal.’ ”
After the Chinese regime repeatedly lied about the deadly virus it had loosed upon the world—and the United States had sacrificed trillions of dollars trying to contain it—Trump professed no interest in communicating with Chinese dictator Xi Jinping. “I don’t speak to him much anymore. I purposely don’t want to speak,” says the president. “You know, I don’t want to be the schmuck that talks to him: ‘How is everything? How’s the world?’ ”
Trump’s language is crude but he was no doubt expressing the views of countless others in this miserable year of pandemic. And he has mobilized much of the U.S. government to counter the Chinese Communist Party’s myriad hostile actions, which are the true obscenity.
There’s a media cliché that dismisses Trump policy as ignorant populism for factory workers in Middle America. But what’s clear now is that the president has won the intellectual argument on China by exposing the failure of a policy pursued by both parties for nearly half a century. This doesn’t mean he’s won the argument for tariffs generally or for more government intervention in cross-border commerce. But he’s forced the U.S. political and business elite to acknowledge that a communist dictatorship pursuing theft as a business model is not free trade. Trump has also forced an acknowledgment that economic engagement has failed to bring democracy and liberty to the Chinese people or security to China’s neighbors.
A CEO of a large U.S. financial institution tells us that by changing American policy and imposing tariffs on China, the president got results. “I would not have done that myself, but it worked. And anyone who says it didn’t work is not being fair,” says the CEO. “Trump brought them to the table with tariffs. And I was told that by top Chinese people: ‘He got us to the table.’ ”45
For decades, U.S. business leaders have feared reprisals from the Chinese government if they explain how badly the regime treats their companies. American CEOs also didn’t want to buck the Washington–Wall Street consensus that engagement with China was virtually an unmitigated benefit for business growth and economic vitality. Many business leaders talked about inventions and trade secrets getting stolen in China—but only in private.
Says the financial CEO: “President Trump has been talking about it for quite a long time. I think a lot of people kind of ignored it for too long. We should have been much tougher on China, like going
