Wednesday, August 17, 2022

Biden administration delays ban on Chinese military investments

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The US Treasury has delayed implementing a ban on Americans investing in companies suspected of having links with the Chinese military, which was imposed by Donald Trump after losing the presidential election.

Mr. Trump released in November a executive order which prohibited Americans from investing in Chinese companies blacklisted by Pentagon groups that could threaten US security. The Trump administration has set January 28 as the deadline for the ban to take effect, but the Biden administration said on Wednesday it would extend the date until May 27.

The move comes as the Biden administration begins the process of reviewing actions Mr. Trump took against China last year, including placing a number of Chinese companies on the Pentagon and the Commerce Department. blacklists that prohibit investment in these companies or make it more difficult for them to export technology.

Daniel Tannebaum, a former treasury official, said the extension would give Joe Biden’s team time to assess the policy and try to remove some of the confusion that has arisen in recent weeks of the Trump administration. The Treasury’s Office of Foreign Assets Control granted the extension by issuing what it calls a “general license” on Wednesday.

“This gives the new administration time to potentially clean up a stock that has created significant confusion in the market. Blanket licenses are a common method of fine-tuning sanctions programs after they are implemented to deal with initial unintended consequences, ”said Mr. Tannebaum, Sanctions Expert and Partner at Oliver Wyman.

Jen Psaki, the White House press secretary, said this week that the new Biden administration was leading a series of “complex reviews” of Mr. Trump’s policies related to China, but would proceed with a “patience approach” , suggesting that it would take time. before the new team decides which measures will be maintained and which will be modified or canceled.

“This means that we’re going to have consultations with our allies, we’re going to have consultations with Democrats and Republicans, and we’re going to allow the interagency process to work its way through to review and assess how we should move forward with it.” our relationship, ”Ms. Psaki said on Monday.

Investors are confused about the scope of the U.S. government’s ban on investing in certain Chinese companies, in part because the Trump administration has struggled to explain its own policies during its last few weeks in office.

Within the Trump administration, Steven Mnuchin, the Secretary of the Treasury considered less belligerent towards China, fought a number of battles with Mike Pompeo, Secretary of State, and the Pentagon, who pleaded for harder action.

While Mr. Mnuchin lost a battle against exclude subsidiaries among Chinese companies on the Pentagon’s list after the ban, he managed to push back a move to include Alibaba, the Chinese e-commerce company, and Baidu, the Chinese search engine, on the ministry’s blacklist. defense.


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