Secretary of State Mike Pompeo is in no hurry to try to bill China for the economic damages caused by the coronavirus pandemic.
“Our first priority, unambiguously, is to address the crisis in which we find ourselves as a direct result of this virus that came out of Wuhan, China,” Pompeo told reporters. “We’ve then got to get the economy cranked back up.”
President Trump raised the prospect of demanding that China pay a “substantial” amount of money to countries harmed by the pandemic, which already has forced the U.S. economy to contract by 4.8% in the first quarter of this year. Outrage over the Chinese Communist Party’s initial coronavirus cover-up has spurred a variety of punitive plans, but realistic options are limited by the difficulty of forcing Beijing to accept liability.
“There’ll be ample time to evaluate how it is we hold accountable those responsible for loss of what is now tens of thousands of American lives and enormous amount of wealth — not only American wealth, but the global economy’s devastation as a result of this virus,” Pompeo said Wednesday.
Trump suggested earlier this week that China’s culpability should lead to major financial penalties, while U.S. lawmakers have proposed various ideas for how to extract money from China. “We haven’t determined the final amount yet,” the president said Monday. “It’s very substantial. If you take a look at the world — I mean, this is worldwide damage. This is damage to the U.S., but this is damage to the world.”
A senior Chinese diplomat dismissed that proposal. “The sole purpose for some U.S. politicians trying to fool others with their obvious lies is to shift the blame of their own incompetence,” Chinese Foreign Ministry spokesman Geng Shuang said Tuesday.
China’s defiant posture has contributed to the sense that Trump’s proposal is rhetorical — along the lines of his famous, and unfulfilled, pledge to build a wall on the southern border and make Mexico pay for it. “There’s calls for it, but to actually try and do it is much more difficult,” the Heritage Foundation’s Riley Walters, an international economist at the conservative think tank, told the Washington Examiner. “It makes for great rhetoric, but to actually act on it is much harder.”
Some Republican lawmakers and conservative media pundits have proposed that Trump could knock the cost of the pandemic off the interest payments that the Treasury Department makes for debt owned by China. But such a move would “shatter the faith of every holder of American debt,” Walters believes, with potentially severe consequences for the U.S. economy.
“The only reason we’re able to have this $2 trillion stimulus to save the U.S. economy is because we’re able to deficit-spend,” the Atlantic Council’s Matthew Kroenig agreed. “Investors around the world have to be willing to buy U.S. debt … confident the United States government is going to repay them with interest. So if they start to question that, then either they don’t buy it, or they demand a higher price to buy those bonds.”
Some lawmakers want to strip China of the “sovereign immunity” currently provided by federal law in a way that would allow people harmed by the pandemic to sue for damages in U.S. courts. Versions of this idea have been proposed by prominent China hawks such as Sen. Tom Cotton, an Arkansas Republican, as well as Arizona Republican Sen. Martha McSally and Sen. Marsha Blackburn of Tennessee.
China could ignore any order issued by a U.S. judge, but such legislation, and the eventual lawsuits, set the table for a seizure of Chinese assets in American jurisdictions. “That process of getting the order with the judgment itself can be a victory because you never know later down the road when you can collect on the judgment,” a Senate Republican aide said.
Some of those proposals have a long fuse, but Pompeo implied that the administration wouldn’t shrink from a combative punitive response, in whatever form it might take. “We’ll get that timing right,” he said.
