Senate Passes Sanctions Bill on China Over Hong Kong Law
The U.S. Senate passed by unanimous consent a bipartisan bill that would put sanctions on Chinese officials who erode Hong Kong’s limited autonomy from Beijing, as well as the banks and firms that do business with them.
Because it sets mandatory sanctions, the legislation has drawn objections from Trump administration officials concerned it could hobble their ability to conduct diplomacy with China and give Congress too much power over foreign relations, according to congressional, administration and industry officials.
Still, they say, the bill’s fine print provides the White House with some flexibility in how those sanctions are levied, assuaging some administration concerns.
Under Senate rules, a single objecting senator could have blocked the bill. Sen. Kevin Cramer (R., N.D.) had blocked it earlier this month, citing the need for feedback from the Trump administration. But no one stepped up to do so on Thursday, and it passed by voice vote.
The legislation, sponsored by Sen. Chris Van Hollen (D., Md.) and Sen. Pat Toomey (R., Pa.), aims to defend human rights in Hong Kong and pressure China to preserve the territory’s special status.
The sponsors say China’s introduction of new national-security laws in Hong Kong made the legislation more urgent. Those laws, they say, dealt a blow to the territory’s autonomy as Beijing moves to stop pro-democracy protests that have challenged Chinese President Xi Jinping.
“Hong Kong affairs are China’s domestic affairs that allow no external interference,” said Fang Hong, a spokeswoman for the Chinese embassy. “We urge the U.S. side to come to terms with the reality, and immediately stop meddling with Hong Kong affairs and China’s domestic affairs as a whole before it is too late,” she said, warning of unspecified “necessary countermeasures.”
The White House didn’t respond to a request for comment.
The bill presents a challenge for Mr. Trump, who has toughened his tone on China and blamed it for the spread of coronavirus. But the president has also been reluctant to embrace measures sought by Congress for fear they could upset the trade deal he considers a major accomplishment.
The bill will proceed to the House, where a companion bill has been introduced by Reps. Brad Sherman (D., Calif.) and Ted Yoho (R., Fla.).
In another move aiming to counter China, a group of lawmakers on Thursday introduced legislation that would pump tens of billions of dollars in new funding into U.S. semiconductor manufacturing.
The bill, backed by Sens. Tom Cotton (R., Ark.) and Chuck Schumer (D., N.Y.), among others, includes $20 billion of incentives for semiconductor manufacturing and research facilities, plus $5 billion in research and development money for federal agencies. A separate bill introduced this month by a different group of lawmakers aimed to support the industry with $10 billion of federal matching grants for states and $12 billion for research and development.
Mr. Van Hollen said his Hong Kong bill establishes a set of mandatory sanctions. “It requires the administration to identify all those individuals who are culpable and complicit in taking away the rights of the people in Hong Kong,” he said. “And more than that, would sanction those banks that allow those individuals to do business.”
“That’s an action where at least there’s a chance that the government of China will listen because they understand it’s not just a statement by the United States Senate; they understand it’s a statement with penalties,” he added.
The bill would impose sanctions on people or entities that the administration identifies as materially contributing to the contravention of China’s obligations for preserving Hong Kong’s autonomy. According to Mr. Toomey’s office, examples include a police unit cracking down on protesters or Chinese Communist Party officials who implement the national-security law.
Besides creating potential diplomatic tension as Chinese officials and government entities are blacklisted, the bill has additional teeth by targeting the financial sector. Banks found knowingly doing business with blacklisted officials and agencies would also be placed under sanctions.
One of the Trump administration’s remaining points of contention is a provision in the bill that gives Congress the ability to override a president’s decision to waive or terminate sanctions through a joint resolution of disapproval, according to people familiar with the matter. Such a resolution would have to pass both the House and Senate by a veto-proof two-thirds majority.
The legislation also includes nonbinding language that supports allowing people in Hong Kong who face persecution from China to become eligible for lawful entry into the U.S.
The Senate also unanimously passed a resolution on Thursday condemning China’s new national-security law for Hong Kong, offered by Sen. Josh Hawley (R., Mo.).
“This could be our last opportunity to stay Beijing’s hand before it destroys what is left of freedom in this city. Beijing must know that its actions have consequences,” Mr. Hawley said.
Shortly before the sanctions bill passed, Mr. Toomey thanked the Treasury Department, saying its sponsors had “worked extensively to get to the point where they are in agreement with this legislation.”
He said he hoped both the resolution and the sanctions legislation “are on their way soon to the president’s desk for his signature.”
For the legislation to be effective, Mr. Van Hollen said, the administration would have to follow the law and impose the sanctions it mandates.
The Democratic senator said the administration “currently has authority to impose sanctions against China for its actions in Hong Kong, based on legislation that this body passed last year to uphold the voice of human rights and democratic rights for the people of Hong Kong.”
“Despite some statements from the secretary of state, the administration has still taken no action,” he added.
A State Department spokeswoman didn’t immediately comment on the bill’s passage or the department’s stance toward the legislation. Secretary of State Mike Pompeo, a frequent critic of Beijing, said Thursday that the U.S. would join a special dialogue with the European Union to confront unwelcome Chinese policies and defend democracy.
Mr. Cramer, a Republican co-sponsor of the sanctions bill, told Politico in an interview that the White House had asked him to block it on June 17 while the administration tried negotiating technical and policy changes.
After the bill’s passage on Thursday, Mr. Cramer indicated he no longer had any problems with it and was grateful his colleagues and the Treasury Department were able to improve it.
“It affirms our support for the people of Hong Kong who are fighting for their freedom,” he said. “I urge the House to take it up and send it to the president’s desk.”
Photo: Sen. Pat Toomey (R., Pa.), seen in March, sponsored a bill with Sen. Chris Van Hollen (D., Md.) that they said was urgently needed after China introduced new national-security laws in Hong Kong. - PHOTO: STEFANI REYNOLDS/CNP/ZUMA PRESS
