On Tuesday, President Trump sent the markets lower by publicly musing about not cementing a trade deal with China until after the election. He may have been attempting to present the image of being in charge of that decision when it was out of his hands.
The U.S. House on Tuesday passed H.R. 649, “To condemn gross human rights violations of ethnic Turkic Muslims in Xinjiang, and calling for an end to arbitrary detention, torture, and harassment of these communities inside and outside China.” A similar bill had already passed the Senate.
In both cases there was broad bipartisan support, introduced by Republicans Christopher Smith in the House and Marco Rubio in the Senate. They were updated versions of bills which had failed to garner enough support to pass during the previous Congress. After public revelations during the past year showing concentration camps and forced indoctrination, and following the international visibility of the Hong Kong protests, Congress has decided to condemn violent Chinese oppression of its citizenry.
Whereas the Senate bill calls for disapproval and a consideration of sanctions by the President, the House bill has teeth, requiring aggressive sanctions against China both monetarily and in the form of technology restriction.
The Senate and House will now need to reconcile the differences in these two bills. While the Senate wishes to hand all decision-making authority to the President, the House is attempting to assert Congress’ power over national policy.
China is currently deciding whether it wants to accept the monetary boost it would see by rolling the reciprocating tariffs back to 2017 levels or whether it would prefer to subject American farmers to another year of dismal sales and farm closures, thus damaging Trump’s chances at re-election. The effort to enact sanctions is likely to be a factor in their decision.
China is very unhappy with the passage of the House bill. They have previously threatened retaliation were the bill to pass, and according to the South China Morning Post the retaliatory efforts being considered include restricting access to American diplomats’ movements through China.
