Senators Push ‘Unprecedented’ Sanctions on China Over Hong Kong

(Bloomberg) -- A Senate Republican who's sponsoring legislation to penalize banks that work with Chinese officials moving to crack down on dissent in Hong Kong said his bill would bring “unprecedented” action to the issue.

Senator Pat Toomey of Pennsylvania said his bill “penalizes the banks that choose to finance the erosion of Hong Kong's autonomy and put marginal profits ahead of basic human rights.”

But not all senators are supportive of the measure. Some questioned at a Senate Banking Committee hearing Thursday whether unilateral U.S. sanctions would have any effect on the situation in Hong Kong, and might actually backfire.

“While I would support effective calibrated additions to our present sanctions arsenal, an approach that narrowly focuses on unilateral U.S. sanctions, including new mandatory secondary sanctions on large foreign banks, may be ineffective and have unintended consequences harmful to our strategic interests,” said top Banking Committee Democrat Sherrod Brown of Ohio.

Toomey introduced the bank sanctions legislation along with Democratic Senator Chris Van Hollen of Maryland.

“It's very important that we deploy the full arsenal and tools at our disposal,” Van Hollen said. “It's important that Congress move forward on this.”

Toomey said the measure would be “be an unprecedented action toward the Chinese Communist officials and it is intended to create obstacles to that aggression -- obstacles that the leadership in Beijing has not encountered before.”

U.S. Move on Hong Kong Leaves Trump With Tough-or-Gentle Options

Brown said that crafting new sanctions could give the Trump administration reason to delay using tools already at his disposal such as the 2019 Hong Kong Human Rights and Democracy Act, which provides for sanctions on Chinese officials seeking to undermine Hong Kong's autonomy.

“President Trump could use these authorities tomorrow,” Brown said. “Congress should press the White House to do its job, with a comprehensive and multilateral approach.”

“The efficacy of unilateral sanctions is not particularly compelling,” said Senator Jack Reed, a Democrat from Rhode Island.

Peter Harrell, an adjunct senior fellow at the Center for a New American Security, said unilateral sanctions, particularly on a country and economy as large as China, are “not nearly as effective as multilateral sanctions.”