Tensions between China and the US were already at an all-time high much before the coronavirus pandemic. Now, the countries have resorted to a blame game regarding the origins of the virus, as well as its ill-handling, which ultimately led to the rapid spread of the pandemic. As a response, Donald Trump has ordered Eugene Scalia, the US Labour Secretary, to exclude the Thrift Savings Plan, which is a federal employee retirement fund, from investing in Chinese equities.
Both Larry Kudlow, who is the National Economic Council Chair, and Robert O’Brien, the national security advisor, penned a letter to Eugene Scalia, insisting the White House’s discontent with investments in Chinese companies, ordering the Thrift Savings Plan to pull out $4 billion worth of invested assets. According to the letter, both Kudlow and O’Brien state a perceived threat to national security and investment risks as the reasoning behinfd the sudden requested withdrawal.
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Scalia then reiterated the request to the chairman of the Federal Retirement Thrift Investment Board, Michael Kennedy, adding that the order was initiated by the President. Such a move will most likely further intensify tensions between the two countries, and jeopardize the Phase One trade deal.
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