Senior U.S. officials are beginning to explore proposals for punishing or demanding financial compensation from China for its handling of the coronavirus pandemic, according to four senior administration officials with knowledge of internal planning.
The move could splinter already strained relations between the two superpowers at a perilous moment for the global economy.
Senior officials across multiple government agencies are expected to meet Thursday to begin mapping out a strategy for seeking retaliatory measures against China, two people with knowledge of the meeting said, speaking on the condition of anonymity because they weren’t authorized to disclose the planning. Officials in American intelligence agencies are also involved in the effort.
President Trump has fumed to aides and others in recent days about China, blaming the country for withholding information about the virus, and has discussed enacting dramatic measures that would probably lead to retaliation by Beijing, these people said.
In private, Trump and aides have discussed stripping China of its “sovereign immunity,” aiming to enable the U.S. government or victims to sue China for damages. George Sorial, who formerly served as a top executive at the Trump Organization and is involved in a class-action lawsuit against China, told The Washington Post he and senior White House officials have discussed limiting China’s sovereign immunity. Legal experts say an attempt to limit China’s sovereign immunity would be extremely difficult to accomplish and may require congressional legislation.
Some administration officials have also discussed having the United States cancel part of its debt obligations to China, two people with knowledge of internal conversations said. It was not known if the president has backed this idea.
Asked about this on Thursday, Trump said “you start playing those games and that’s tough.” He said canceling interest payments to China could undermine the “sanctity of the dollar,” but he added that there were other ways to levy extreme penalties on China, such as raising $1 trillion by imposing tariffs on Chinese imports.
Administration officials strongly cautioned that many of the discussions are preliminary and that little formal work has begun on turning these initial ideas into reality. Other administration officials are warning Trump against the push to punish China, saying the country is sending supplies to help the American response.
“Now is just not the right time,” one senior administration official involved in the talks said. “There will be a time to do it.”
But in recent days, some believe the battle between the administration’s economic advisers’ cautious approach to China and national security team’s push to retaliate against Beijing has begun to tilt toward the national security position.
“Punishing China is definitely where the president’s head is at right now,” one senior adviser said.
Some political advisers have also encouraged Trump to take a more forceful swing at China because they think it will help him politically.