What is going on with the Trump congressional storm over the US bill 'lifting' investment restrictions on China?

2024-12-20 1220

After President elect Donald Trump opposed the US government spending bill, the new temporary spending bill was significantly reduced from 1547 pages to 116 pages. The newly revised bill removes all provisions related to China and lifts restrictions on investment in China. The draft involves overseas transaction regulations related to China in areas such as chips, quantum technology, and artificial intelligence (AI).

The South China Morning Post (SCMP) in Hong Kong reported that provisions restricting US investment in China have been removed from the temporary spending bill negotiated on Thursday (December 19) to avoid a government shutdown, laying the foundation for the new Congress to reconsider the topic in 2025.

(Source: SCMP)

The draft spending bill will provide funding for the US government until mid March 2025.

Among them, the bill originally contained provisions prohibiting or requiring notification of China's overseas transactions in areas such as semiconductors, quantum technology, and AI.

This version also includes several other clauses addressing China's concerns, including expanding scrutiny of China's purchases of real estate near national security sensitive locations.

In addition, the bill requires research on the national security risks posed by Chinese made consumer modems and routers.

The final text released on Thursday removed all provisions related to China, which is only 116 pages long, much shorter than the 1547 page bill released on Tuesday evening.

The early version was initially expected to be voted on before the deadline for the government shutdown on Friday, but it was abandoned by Republicans due to Trump's opposition on Wednesday.

Trump has criticized the version as "extremely expensive" and stated that he will not support any plan that does not include extending the federal borrowing limit.

With Trump threatening to impose a 60% tariff on China, markets around the world seem to be wary of a trade war.

Reuters reported that the Indian government and industry sources said that India is preparing to lower tariffs on some agricultural products and other goods mainly imported from the United States, aiming to reach a broader trade and investment agreement after Trump takes office.

A senior government source said that in response to Trump's "reciprocal tax" on Indian goods, some officials from the Indian Ministry of Commerce are preparing to consider reducing tariffs on certain products such as pork. At present, India imposes an import tariff of about 45% on pork, which is mainly supplied by the United States.

Indian officials have realized that Trump's plan to impose tariffs of up to 60% on Chinese imports is an opportunity, and they are building India into an alternative manufacturing base.

A government source who attended some of the meetings said that the government has held consultations on this issue within various ministries and with local think tanks and industrial groups.

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