Katelyn is a student at Howard Payne University, studying public policy in the Guy D. Newman Honors Academy with a secondary major in global studies. She aspires to inform readers of major legislative, political and humanitarian activity in laymen terms, in order to supply the general public with an unbiased analysis that allows them to cultivate opinions by their own free will.
On December 27th, 2024, China issued a statement that condemned the actions of seven military industrial companies and implemented trade sanctions, following the United States’ National Defense Authorization Act of Fiscal Year 2025. The condemned actions include sending military assistance to Taiwan, and the seven companies involved are as follows: Institu, Inc., Hudson Technologies Co., Saronic Technologies, Inc., Raytheon Canada & Australia, Aerkomm Inc., and Oceaneering International, Inc.
What’s Happened
In the statement from China’s Ministry of Foreign Affairs, it was said that such military assistance violated one China principle and three China-US Joint Communiques, in addition to interfering with China’s internal affairs; thereby undermining the country’s sovereignty. All moveable and immoveable properties belonging to the seven companies, and their additional assets in China, have been frozen.
The thesis for the National Defense Authorization Act of Fiscal Year 2025 reads, “To authorize appropriations for fiscal year 2025 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe military personnel strengths for such fiscal year, and for other purposes”. Under subtitle D “Matters Relating to the Indo-Pacific Region”, military assistance is granted to Taiwan in various forms. A link to the full act is attached below.
Reuters reports that the US has approved around $570 million in defense support, as well as an arms sale worth $385 million. Spokesperson for China, Mao Ning, stated that Beijing is committed to taking all necessary measures to safeguard China’s security – such measures include sanctions following these sales. The sanctions prohibit any engagement with the previously listed military industrial companies.
Understanding the Background
The United States has had a long and complex history with China. As it currently stands, China is one of the largest export markets for US goods and the US is the top export market for China. Within this intricate history of trade, both countries have imposed numerous sanctions on the other for various reasons. To best process the current trade conflict between China and the US, it’s important to learn about their historic “partnership”, if one so chooses to call it such.
The People’s Republic of China, the modern state of China, was established in 1949. Since then, the country has existed as one of the most prominent actors in the global market; especially after the country’s significant economic reform during the 70s. This was spearheaded by Deng Xiaoping who encouraged the development of a private industry. Fast forward to 2001, China then entered the World Trade Organization (WTO) after working through major negotiations with the US and other large members.
After their ascension into the WTO, China’s actions became more combative as they continued to incentivize state authority in influencing market outcomes. In 2006, former US president George W. Bush established the Strategic Economic Dialogue (SED) with former Chinese president Hu Jianto. This project sought to modify and reconstruct economic relations between the two countries and continued through Obama’s administration in 2009. Testament to the success of the project varies among politicians and policymakers.
Understanding Sanctions
Throughout this trade-based relationship, both countries have become very familiar with the imposition of economic sanctions. President-elect Donald Trump has perhaps been the most aggressive on this front, implementing many sanctions on China’s trade companies.
Much of the aggression stems from concerns regarding forced labor within China’s trading methods. The US Department of Labor has identified the use of forced labor among Uyghurs, the largest minority ethnic group presiding in north-western China, and other such minorities.
Oftentimes, countries impose sanctions as a response to unethical methods of trade production that violate human rights. This has been one of the largest reasons for American sanctions on Chinese production. Sanctions may also be used to condemn alliances or policies that threaten the interests of another country. All-in-all, economic sanctions may be used to enforce social norms, signal concerns to other nations, coerce government collaboration and coerce a change in policy. For years, sanctions have characterized the relationship between China and the US; and this new sanction is one to keep note of in light of this history.
Are sanctions largely effective or ineffective? Should the preservation of human rights be a priority within trade negotiations between differing countries? How should the US respond to being sanctioned? When aiding an ally, should the US challenge this sanction? Should the US continue to invest itself in matters concerning Taiwan? Take some time to answer these questions for yourself, and consider your politician’s stance on these issues.
RESEARCH:
PRC Ministry of Foreign Affairs
Reuters
Council on Foreign Relations
Congressional Research Service
US Department of Labor
US Government Accountability Office
EconoFact