President Trump has ordered US Federal Investment funds to halt investment in Chinese equities.

Fox Business obtained a letter from National Economic Council Chair Larry Kudlow to Labor Secretary Eugene Scalia which says the White House does not want the Thrift Savings Program to have money invested in China.

The Thrift Savings Plan, a retirement program for federal employees, has roughly $4 billion invested in Chinese equities.

In the letter Kudlow said:

“It has come to our attention that billions of dollars from our federal employees’ retirement funds in the Thrift Savings Plan (TSP) will soon be invested in Chinese companies.

This action would expose the retirement funds to significant and unnecessary economic risk, and it would channel federal employees’ money to companies that present significant national security and humanitarian concerns because they operate in violation of the U.S. sanction laws and assist the Chinese Government’s efforts to build its military and oppress religious minorities.

Further, the Federal Retirement Investment Board is set to implement these plans during a time of mounting uncertainty concerning China’s relations with the rest of the world, including the possibility that future sanctions will result from the culpable actions of the Chinese Government with respect to the global spread of COVID-19 pandemic.  In view of these considerations, we do not believe that proceeding with the investment of the retirement savings of hardworking federal workers in Chinese companies is prudent.”

Currently, the U.S. and China are discussing how to carry out the first phase of a trade deal from January. This new directive from the Trump administration will likely make these discussions more contentious.

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