If China launches an armed attack on Taiwan, then a bipartisan bill offered by U.S. Rep. Tony Gonzales (R-TX) would set up specific consequences to derail a long-standing tax treaty between the United States and China.
“This legislation sends a clear message to the Chinese Communist Party — if you invade Taiwan, severe consequences will follow,” said Rep. Gonzales, a member of the Congressional Taiwan Caucus.
The congressman on April 5 sponsored H.R. 7874 with three original cosponsors, including U.S. Rep. Don Davis (D-NC).
If enacted, H.R. 7874 would require the U.S. Treasury Department to cease the tax treaty between the U.S. and China within 30 days of a presidential determination that China has attacked Taiwan.
Termination of the U.S.-The People’s Republic of China Income Tax Convention would end the tax agreement between the two countries that in 1987 established a treaty to prevent double taxation and income tax evasion.
“Ensuring the safety and security of our partners in the Indo-Pacific region is essential to our nation’s economic and national security endeavors,” Rep. Gonzales said. “I look forward to working alongside my colleagues to get this vital national security legislation across the finish line.”
H.R. 7874 is companion legislation to S. 3861, a bill introduced by U.S. Sen. John Cornyn (R-TX).
“To safeguard our national security and that of our allies, we must ensure severe economic consequences if the People’s Republic of China moves on Taiwan,” said Rep. Davis. “We must deter unprovoked aggression because a threat to democracy anywhere is a threat to democracy right here at home.”