President-elect Donald Trump has announced plans to nominate lawmakers to key foreign policy posts who’ve worked to restrict U.S. retirement assets from being invested in Chinese companies.
Trump on Nov. 13 said he will nominate Sen. Marco Rubio, R-Fla., as secretary of state, and the day prior he tapped Rep. Mike Waltz, R-Fla., as national security adviser.
Both Republican lawmakers have been outspoken critics of the Chinese government and have introduced bills to prevent the Federal Retirement Thrift Investment Board, Washington, from directing retirement savings to Chinese stocks.
Rubio during the first Trump administration led the fight in Congress to block the FRTIB from changing the benchmark for its international fund to an index that included Chinese companies.
In 2019, the board reaffirmed a 2017 decision to shift the TSP's I Fund benchmark to the MSCI ACWI ex-U.S. Investible Market index. That index was made up of about 8% Chinese companies, according to an Aon Hewitt Investment Consulting study presented to the board in October 2019.
The decision led to stiff pushback from senators in both parties and the Trump administration. The board in 2020 decided to pause implementation of the I Fund shift and in November 2023 it voted unanimously to change the benchmark to an index that excludes China and Hong Kong.
In 2022, Rubio held up the nominations of four current FRTIB members until after they said they had no plans to invest Thrift Savings Plan assets in Chinese companies.
Rubio has long sponsored legislation concerning the $954 million Thrift Savings Plan, the retirement system for 7.2 million federal employees and members of the uniformed services. That includes a 2023 bill to amend the FRTIB’s fiduciary duty to include a requirement not to harm national security. Under the bill, which has not advanced, Thrift Savings Plan assets could not be invested in "Communist Chinese military companies."
Waltz has also introduced legislation to prevent the FRTIB from directing TSP assets to Chinese stocks. Earlier this year, he offered an amendment to do just that to the FY25 National Defense Authorization Act. The amendment passed out of the House Armed Services Committee but was not included in the bill the House passed in June.
Also of note, Rubio in September introduced a bill with Rep. John Moolenaar, R-Mich., chair of the House Select Committee on the Chinese Communist Party, to encourage divestment from Chinese securities by removing their beneficial capital gains tax rate.
“The capital gains tax rate was meant to encourage investment in American innovation, not fund an oppressive communist regime, but Wall Street continues to give money to our adversaries and reap rewards from the American tax system,” Rubio said in a statement at the time. “Enough is enough.”
Separately, lawmakers are currently working on a bill to restrict investments in certain Chinese technology sectors. In October, the Treasury Department finalized rules limiting U.S. investments in Chinese companies involved in the semiconductors and microelectronics, quantum information technologies and artificial intelligence sectors that garnered bipartisan support.