TODAY WAS DEADLINE day for ByteDance’s divestiture of the short-video-sharing app TikTok, or the United States would ban the app. It is not clear where things stand (update: the deadline has been extended) but US President Donald Trump appears to have moved on to a new executive order.
Today he authorised a prohibition on US investments in Chinese firms held to be owned or controlled by the military. Putting the brakes on the modernisation of the People’s Liberation Army is a particular policy objective of his administration.
The executive order bans US investment firms and pension funds from buying and selling the shares of 20 Chinese companies designated in June by the Pentagon as having military ties. Eleven more companies were added to the list in August. They are also subject to the investment ban, which takes effect on January 11.
The list includes well known companies such as China Mobile and China Telecom, both of which have US-listed subsidiaries.
US shareholders must sell existing holdings by November next year. If more companies are added to the proscribed list, US investors will have 60 days to divest the shares.
This latest measure is based on the International Emergency Economic Powers Act, which gives the US president wide scope to take actions to protect national security, and is becoming an increasingly favoured tool of the administration to counter China.
It follows confirmation of the arrival of US marines in Taiwan for training exercises. While the word is that this is far from the first time that US forces have trained their Taiwanese counterparts, it is the first time that it has been publicly acknowledged — unlike the big-ticket arms sales which tend to get the full hullabaloo.
Another visit by a senior US government official is also reportedly on the cards.
Taken together, and in the wake of Secretary of State Mike Pompeo’s pumping up of the Quad, this is starting to look like a president leaving a plateful for his successor or piling up his own plate in anticipation of a second term.
Either way, it is unlikely to go down well in Beijing.