Trump orders pension fund to halt investments in Chinese stocks
Trump orders pension fund to halt investments in Chinese stocks

The persistent standoff between China and the US has come to a new level. Both leaders continue to challenge each other and seem unwilling to compromise. For instance, Donald Trump has recently directed the government retirement savings fund to block investments in Chinese stocks. Donald Trump plans to withdraw $4.5 billion from the federal pension fund, including the shares of Chinese companies which are listed on US stock exchanges. Analysts warn that this move may deteriorate investment relationships between US federal pension funds and Chinese companies. It is worth noting that the tensions between Washington and Beijing escalated after Donald Trump criticized China for a bad response to the coronavirus outbreak. The president's order came into force on May 11. Earlier, US National Security Advisory Robert O’Brien and White House Economic Advisor Larry Kudlow sent a letter to Labor Secretary Eugene Scalia warning him against investing retirement savings in China-based stocks. According to the officials, Chinese assets of $4.5 billion make up a big share in a number of federal pension funds which may involve certain risks. They also explained that these stocks belong to Chinese companies that do not comply with the US legislation, thus making financial transactions less transparent. Obviously, the US policymakers see investments in China’s assets as a potential threat to US national security. The measures taken by the US administration may signal that the US does not intend to make any more investments in China’s economy. It may also lead to further escalation of the US-China conflict. Experts fear that Trump’s decision will threaten the trade deal between Washington and Beijing.

Published: 2020-05-21 10:26:00 UTC
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