On February 9, the United States House of Representatives overwhelmingly passed the “PROTECT Taiwan Act” with a vote of 395 to 2. The act calls for the United States to take all necessary measures to exclude China from international financial systems and organizations if Taiwan’s security is threatened by Chinese actions. Experts believe that this act primarily serves as a declaration of the United States’ firm commitment to ensuring Taiwan’s security, thereby increasing deterrence against Beijing.
The H.R.1531 bill, also known as the “Pressure Regulatory Organizations to End Chinese Threats to Taiwan Act,” or simply the “Taiwan Protection Act,” was jointly introduced by Frank Lucas, Chairman of the Monetary Policy, Debt Market Resilience, and Economic Prosperity Special Working Group of the House Financial Services Committee, and Democratic federal representative Vincente Gonzales.
According to the bill, if the U.S. President notifies Congress under relevant provisions of the Taiwan Relations Act that Chinese actions pose threats to the security, society, or economic system of the Taiwanese people, and pose risks to U.S. interests, the U.S. will seek to push for the expulsion of Chinese representatives from international organizations such as the G20, BIS, FSC, BCBS, IAIS, and IOSCO, to the fullest extent possible through the Treasury Department, the Federal Reserve, and the SEC.
Szu Tzu-yun, Director of the Defense Strategy and Resources Research Institute at the Taiwan Institute for National Defense and Security Studies, said that while the impact of the bill on China’s internal affairs is currently limited, the significance lies in demonstrating support for Taiwan’s security and enhancing deterrence against Beijing.
Tzu-yun added that the bill is highly operational. Despite some economic disputes between the U.S. and Europe and differing views on issues such as Greenland, China remains a common threat to the U.S. and Europe. In addition, Japan’s increasingly tough stance towards Beijing further enhances the operational feasibility of the bill.
“If a military conflict between Beijing and Taipei truly occurs, international sanctions will be initiated, including in the realm of international financial transfers. This could disrupt various financial transactions, not only through the World Bank but also through the United Nations and non-UN financial institutions, even affecting credit cards, causing significant challenges for China,” he said.
China expert Wang He stated that this act essentially reflects the Western experiences of sanctioning Russia and is preparing to apply a similar approach to China. If China initiates a war in the Taiwan Strait, the U.S. will undoubtedly impose sanctions on China. This bill serves as a warning to discourage China from escalating tensions to that extent.
He emphasized that if China attacks Taiwan, there will be numerous consequences, and facing economic sanctions is just one important aspect. Since the Russia-Ukraine conflict, China has also made preparations for potential sanctions, such as significantly reducing its purchases and holdings of U.S. debt, and adjusting its policies towards Europe and the U.S. accordingly.
He stated that China’s ambition to take Taiwan will not waver despite the anticipated sanctions. However, the resolute intervention and determination shown by the U.S. through this bill will deter China. “At present, the U.S. is still implementing a strategy of strategic ambiguity, making it impossible for China to predict their final decision.”
Republican federal representative Lucas, who introduced the bill, stated before the vote in the House that the U.S. must clearly indicate that it will not tolerate any acts of aggression. He emphasized that if Taiwan is invaded, the U.S. will respond forcefully, including implementing multiple sanctions and economic penalties. Excluding China from international organizations must be part of the response measures.
French Hill, Chairman of the House Financial Services Committee and Republican federal representative from Arkansas, along with Democratic federal representative Joyce Beatty from Ohio, expressed their support for the bill during the House session.
After passing the House, the “Taiwan Protection Act” still needs to be approved by the Senate and signed by the President to come into effect. It is worth noting that Lucas previously introduced a similar bill in the previous Congress, which passed the House but was subsequently stalled in the Senate.
Tzu-yun believes that the probability of the bill passing is high this time as the Senate is also controlled by the Republican Party. President Trump is unlikely to overturn the decision of both chambers, so it is only a matter of time before the bill officially takes effect.