Donald Trump administration bolsters order barring US investment in Chinese firms

Specifically, some media outlets reported that Treasury was seeking to exclude Chinese companies’ subsidiaries from the scope of the White House directive.

The Trump administration on Monday strengthened an executive order barring US investors from buying securities of alleged Chinese military-controlled companies, following disagreement among US agencies about how tough to make the directive.

FILE - In this Monday, June 1, 2020 file photo, President Donald Trump holds a Bible during a visit outside St. John's Church across Lafayette Park from the White House in Washington. (AP Photo/Patrick Semansky)

The Treasury Department published guidance clarifying that the executive order, released in November, would apply to exchange-traded funds and index funds as well as subsidiaries of Chinese companies designated as owned or controlled by the Chinese military.

The “frequently asked questions” release, posted on the Treasury website on Monday, came after Reuters and other news outlets reported that a debate was raging within the Trump administration over the guidance. The State Department and the Department of Defense (DOD) had pushed back against a bid by Treasury Department to water down the executive order, a source said.

Specifically, some media outlets reported that Treasury was seeking to exclude Chinese companies’ subsidiaries from the scope of the White House directive, which bars new purchases of securities of 35 Chinese companies that Washington alleges are backed by the Chinese military, starting in November 2021.

The list of designated companies, which was mandated by a 1999 law, currently contains 35 companies, including oil company CNOOC Ltd and China’s top chipmaker, Semiconductor Manufacturing International Corp.