Luetkemeyer Questions Experts on Effectiveness of U.S. Sanctions
Washington, January 30, 2024
Tags: Financial Services
Today, Chairman Blaine Luetkemeyer (MO-3) questioned trade experts as part of the Financial Services Subcommittee on National Security hearing entitled, “Better Investment Barriers: Strengthening CCP Sanctions and Exploring Alternatives to Bureaucratic Regimes.”
Rep. Luetkemeyer: “We need to understand how we can curtail investment in China in a way that protects the United States as well as hurts the Chinese as much as possible. So, Mr. Feddo, in your illustrious career here, you've been working with different sanctions and export controls. It would appear to me that we need to be able to work with our allies to make those sanctions and export controls effective. Can you explain to me how that can happen? Is it happening? Do we have a plan?”
Thomas Feddo, Founder/Principal, The Rubicon Advisors LLC: “I don't know whether it's happening, or we have a plan, but of course, any of these economic statecraft tools, in my opinion, are better and more effective if there is a multilateral approach.
For example, in the course of implementation of FIRMA and the expansion of CFIUS authorities, we spent a great deal of time encouraging other countries to develop similar screening mechanisms for inbound capital that could pose national security risks. And so that is something that I think makes these sorts of economic statecraft tools more effective.”
Rep. Luetkemeyer: “I say this all the time, that the more you enhance the China economy, the better you're feeding the beast that's going to eat us at some point. And so, to me, this is really, really important that we get this right— that we understand that we need to minimize our investment there and find a way to slowly decouple ourselves from Chinese investment and Chinese trade.”
Background: Congressman Andy Barr, who also serves on the House Financial Services Committee, introduced the Chinese Military and Surveillance Company Sanctions Act. This vital and comprehensive measure to safeguard global interests would require the president to sanction Chinese entities that are crucial to China’s defense and surveillance technology sectors. Unlike standard investment restrictions, these comprehensive sanctions would prohibit nearly all economic interactions with blacklisted firms.
Rep. Luetkemeyer says this bill is the best answer to responsibly decouple the U.S. economy from China.