Trump considers order to block savings fund from Chinese firms

US President Donald Trump takes questions in in Washington on April 30, 2020.
US President Donald Trump takes questions in in Washington on April 30, 2020.PHOTO: EPA-EFE

NEW YORK (BLOOMBERG) - US President Donald Trump is exploring blocking a government retirement fund from investing in Chinese equities considered a national security risk, a person familiar with the internal deliberations said.

The Thrift Savings Plan - the federal government's retirement savings fund - is scheduled to transfer roughly US$50 billion (S$70 billion) of its international fund to mirror an MSCI All Country World Index, which captures emerging markets, including China.

The Federal Retirement Thrift Investment Board overseeing the fund made a decision in 2017 that the money should be moved by mid-2020. Opponents of the transfer in recent weeks have engaged in a last-minute effort to stop it.

The action would possibly come in the form of an executive order, the person said. A White House spokesman didn't immediately respond to a request for comment.

Senator Marco Rubio, a Florida Republican, applauded reports of the move in a statement on Thursday (April 30).

"It's outrageous that five unelected bureaucrats appointed by the previous administration have ignored bipartisan calls from Congress to reverse this short-sighted decision, and I applaud President Trump for directing his administration to take swift action preventing this from going forward," he said.

Rubio and others have pushed for action and introduced legislation to force the fund to reverse its decision.