Congress would target China with new restrictions in massive defense bill

WASHINGTON– The Trump administration may have softened its language toward China to maintain a fragile truce in its trade war, but Congress is moving forward with more restrictions in a defense authorization bill that would deny Beijing investments in highly sensitive sectors and reduce U.S. dependence on Chinese biotechnology companies.

The 3,000-page bill approved Wednesday by the House includes a provision to closely examine U.S. investments in China that could help develop technologies aimed at boosting Chinese military power. The bill, which will next go to the Senate, would also prohibit government money from being used for equipment and services from blacklisted Chinese biotech companies.

Additionally, the National Defense Authorization Act would strengthen U.S. support for the self-ruled island of Taiwan, which Beijing claims as its own and says it will take by force if necessary.

“Taken together, these steps reflect a serious and strategic approach to countering the Chinese Communist Party,” said Rep. Raja Krishnamoorthi, the top Democrat on the House Select Committee on the Chinese Communist Party. He said this approach “stands in stark contrast to recent actions by the White House.”

The compromise bill authorizing $900 billion for military programs was released two days after the White House unveiled its national security strategy. The Trump administration abandoned Biden-era language that presented China as a strategic threat and said the United States would “rebalance America’s economic relationship with China,” an indication that President Donald Trump is more interested in a mutually beneficial economic relationship with Beijing than long-term competition.

The White House also this week authorized Nvidia to sell an advanced type of computer chip to China, with those most hawkish toward Beijing concerned that it would help boost the country’s artificial intelligence.

The China-related provisions in the traditionally bipartisan defense bill “make clear that regardless of the tone from the White House, Capitol Hill is engaged in a fierce, long-term competition with Beijing,” said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies, a Washington-based think tank.

If enacted, these provisions “would establish a floor under U.S. competitiveness policy – on capital, biotechnology and critical technologies – that will be very difficult for future presidents to unwind quietly,” he said.

The Chinese embassy in Washington denounced the bill on Wednesday.

“The bill continually promoted the ‘China threat’ narrative, trumpeting military support for Taiwan, abusing state power to undermine China’s economic development, restricting trade, economic and people-to-people exchanges between China and the United States, undermining China’s sovereignty, security and development interests, and disrupting both sides’ efforts to stabilize bilateral relations,” said Liu Pengyu, spokesperson for the embassy.

“China strongly deplores and firmly opposes this,” Liu said.

U.S. policymakers and lawmakers have been working for several years on bipartisan legislation aimed at curbing investment in China in cutting-edge technologies such as quantum computing, aerospace, semiconductors and artificial intelligence. Those efforts failed last year when Tesla CEO Elon Musk opposed a spending bill.

Musk has numerous business interests in China, including a Tesla gigafactory in the eastern city of Shanghai.

The provision was included in the must-pass defense policy bill praised by Rep. John Moolenaar, a Michigan Republican who chairs the House select committee on the Chinese Communist Party.

“For too long, the hard-earned money of American retirees and investors has been used to strengthen China’s military and economy,” he said. “This legislation will help put an end to this situation. »

Last year, Congress failed to pass the BIOSECURE Act, which cited national security to block federal money from benefiting a number of Chinese biotechnology companies. Critics said at the time that it was unfair to target specific companies, warning that the measure would delay clinical trials and hamper the development of new drugs, increase drug costs and harm innovation.

The NDAA provision no longer names companies but leaves it to the Office of Management and Budget to compile a list of “biotechnology companies of concern.” The bill would also increase Pentagon investments in biotechnology.

Moolenaar praised efforts to take “defensive measures to secure U.S. pharmaceutical supply chains and genetic information from malicious Chinese companies.”

The defense bill would also authorize an increase in funding, to $1 billion from $300 million this year, for Taiwan-related security cooperation and direct the Pentagon to establish a joint drone and counter-drone program.

Another provision supports Taiwan’s bid to join the International Monetary Fund, which would provide the self-ruled island with financial protection from China.

It comes amid mixed signals from Trump, who appears careful not to antagonize Beijing as he seeks to strike trade deals with Chinese President Xi Jinping. The Chinese leader urged Trump to treat the Taiwan issue “cautiously” as Beijing views its claims on Taiwan as a core interest.

In the new national security strategy, the White House says the United States does not support any unilateral change to the status quo in the Taiwan Strait and emphasizes that the United States should seek to deter and prevent large-scale military conflict.

“But the U.S. military cannot, and should not have to, do it alone,” the document said, urging Japan and South Korea to increase their defense spending.