Jefferson City News

Today, Chairman Blaine Luetkemeyer (MO-3) led the Financial Services Subcommittee on National Security hearing, focusing on the effectiveness of U.S. sanctions and exploring alternatives to bureaucratic regimes. The hearing aimed to understand how to curtail investment in China in a way that protects the United States and hurts the Chinese as much as possible.

During the hearing, Rep. Luetkemeyer highlighted the importance of working with allies to make sanctions and export controls effective. He turned to Thomas Feddo, Founder/Principal of The Rubicon Advisors LLC, to gain insights into this matter. Rep. Luetkemeyer asked, "Can you explain to me how that can happen? Is it happening? Do we have a plan?"

In response, Feddo emphasized the significance of a multilateral approach to economic statecraft tools. He stated, "I don't know whether it's happening, or we have a plan, but of course, any of these economic statecraft tools, in my opinion, are better and more effective if there is a multilateral approach."

Feddo further highlighted the efforts made to encourage other countries to develop similar screening mechanisms for inbound capital that could pose national security risks. He explained, "We spent a great deal of time encouraging other countries to develop similar screening mechanisms for inbound capital that could pose national security risks. And so that is something that I think makes these sorts of economic statecraft tools more effective."

Rep. Luetkemeyer emphasized the importance of minimizing investment in China and gradually decoupling from Chinese investment and trade. He stated, "The more you enhance the China economy, the better you're feeding the beast that's going to eat us at some point. And so, to me, this is really, really important that we get this right."

In addition to the hearing, Congressman Andy Barr, who serves on the House Financial Services Committee, introduced the Chinese Military and Surveillance Company Sanctions Act. This comprehensive measure aims to safeguard global interests by requiring the president to sanction Chinese entities crucial to China's defense and surveillance technology sectors. These sanctions would prohibit nearly all economic interactions with blacklisted firms.

Rep. Luetkemeyer expressed his support for this bill, considering it the best answer to responsibly decouple the U.S. economy from China. He believes that by implementing comprehensive sanctions, the U.S. can effectively minimize economic interactions with China and protect its own interests.

The hearing and the introduction of the Chinese Military and Surveillance Company Sanctions Act demonstrate the growing concern among policymakers regarding China's economic influence. As the U.S. continues to seek ways to protect its national security and economic interests, discussions surrounding the effectiveness of sanctions and the exploration of alternatives to bureaucratic regimes remain at the forefront of congressional deliberations.