U.S. officials crafting retaliatory actions against China over handling of coronavirus pandemic

WASHINGTON - Senior U.S. officials are beginning to explore proposals for punishing or demanding financial compensation from China for its handling of the coronavirus pandemic, according to four senior administration officials with knowledge of internal planning.

The move could splinter already strained relations between the two superpowers at a perilous moment for the global economy.

Senior officials across multiple government agencies are expected to meet Thursday to begin mapping out a strategy for seeking retaliatory measures against China, two people with knowledge of the meeting said, speaking on the condition of anonymity because they weren't authorized to disclose the planning. Officials in American intelligence agencies are also involved in the effort.

President Donald Trump has fumed to aides and others in recent days about China, blaming the country for withholding information about the virus, and has discussed enacting dramatic measures that would probably lead to retaliation by Beijing, these people said.

In private, Trump and aides have discussed stripping China of its "sovereign immunity," aiming to enable the U.S. government or victims to sue China for damages. George Sorial, who formerly served as a top executive at the Trump Organization and is involved in a class-action lawsuit against China, told The Washington Post he and senior White House officials have discussed limiting China's sovereign immunity. Legal experts say an attempt to limit China's sovereign immunity would be extremely difficult to accomplish and may require congressional legislation.

Some administration officials have also discussed having the United States cancel part of its debt obligations to China, two people with knowledge of internal conversations said. It was not known if the president has backed this idea.

Asked about this on Thursday, Trump said "you start playing those games and that's tough." He said canceling interest payments to China could undermine the "sanctity of the dollar," but he added that there were other ways to levy extreme penalties on China, such as raising $1 trillion by imposing tariffs on Chinese imports.

Administration officials strongly cautioned that many of the discussions are preliminary and that little formal work has begun on turning these initial ideas into reality. Other administration officials are warning Trump against the push to punish China, saying the country is sending supplies to help the American response.

"Now is just not the right time," one senior administration official involved in the talks said. "There will be a time to do it."

But in recent days, some believe the battle between the administration's economic advisers' cautious approach to China and national security team's push to retaliate against Beijing has begun to tilt toward the national security position.

"Punishing China is definitely where the president's head is at right now," one senior adviser said.

Some political advisers have also encouraged Trump to take a more forceful swing at China because they think it will help him politically.

White House officials and multiple congressional lawmakers have become increasingly fixated on China's response to the outbreak and failure to contain it, asserting Chinese officials concealed key information and refused to cooperate with international health organizations. Chinese officials have repeatedly rejected allegations that they did not act swiftly enough to confront the virus.

U.S. officials spoke on the condition of anonymity for this story to discuss private and internal negotiations.

A spokesman for the White House National Security Council said in an email: "We don't comment on internal deliberations."

On Monday, Trump suggested at a White House news conference that the United States will seek hundreds of billions of dollars in damages from China. The president also said he is considering additional measures to punish China, but did not specify what they are. "We can do something much easier than that," Trump said in response to a question about demanding financial compensation from Beijing. "We have ways of doing things a lot easier than that."

On Thursday, Geng Shuang, a spokesman for China's Foreign Ministry, told reporters: "The U.S. should know that their enemy is the virus, not China. . . . They should focus on containment at home and international cooperation, instead of smearing China and shifting the blame onto China."

He added: "As for punishment or accountability, as I have repeatedly stated, such rhetoric has no legal basis, and there's no international precedent. . . . At this time, undermining others' efforts will end up undermining oneself."

The White House discussion around retaliatory measures reflects the increasing conviction among some administration officials about China's alleged culpability in the spread of the virus, as well as political considerations. Recent polling suggests Americans' opinions of China are at a low, and presumptive Democratic presidential nominee Joe Biden has released an ad that paints Trump as being weak on Beijing.

Critics say the administration's efforts to punish China amount to little more than political theater that also risks endangering the American economy and American lives, as China is likely to retaliate against measures taken by the United States. The coronavirus has killed more than 60,000 Americans and cost the nation trillions of dollars in economic activity.

"The chances of getting the Chinese to pay reparations is somewhere between zero and none," said Scott Kennedy, senior adviser at the Center for Strategic and International Studies, a foreign policy think tank. "If your goal is to actually understand the origins and spread of the coronavirus, end this pandemic, restore economic growth, and prevent future crises, you have to get governments and different stakeholders to work together."

When the virus first emerged, Trump praised Chinese President Xi Jinping's handling of the outbreak, saying Xi is doing "a very good job with a very, very tough situation." More recently, Trump concentrated his attacks on the World Health Organization. "If it was a mistake, a mistake is a mistake," Trump said earlier this month of China and the coronavirus. "But if they were knowingly responsible, yeah, I mean, then sure there should be consequences."

Trump has appeared to step up his attacks on China more recently. "We are not happy with China. We are not happy with that whole situation because we believe it could have been stopped at the source," Trump said at a White House news conference Monday. "It could have been stopped quickly, and it wouldn't have spread all over the world."

The potential recourse for U.S. action has been unclear, even as congressional Republicans such as Sen. Lindsey Graham of South Carolina have increasingly demanded the United States "make China pay big time" over the damage. One senior Trump adviser said the "sovereign immunity" issue has been a particular focus of the president's, as it could allow states and the federal government to sue China for damages.

Sens. Tom Cotton, R-Ark., and Josh Hawley, R-Mo., are among members of Congress who have drafted legislation to strip China and other foreign governments of immunity if they took intentional acts to conceal or distort information about the coronavirus that led to damage to other countries. Trump has spoken to Hawley and other Republican senators about punishing China, two people with knowledge of the conversations said.

Sen. Marsha Blackburn, R-Tenn., has also floated waiving interest payments to China for any holdings of U.S. debt, "because they have cost our economy already $6 trillion and we could end up being an additional $5 trillion hit."

Bipartisan proposals have emerged in the Senate to try to move jobs from China to the United States.

The Berman Law Group, a law firm that has launched the first major class-action lawsuit against China over the damage done by the virus, has been consulting with several senior Trump advisers in recent weeks on what they consider the most fruitful way to punish China. The team is both sharing information they learn about China's actions in the case and stressing the value of a massive global lawsuit to make China pay for failing to warn other countries about a lethal virus.

Sorial, the former Trump Organization lawyer who has partnered with the Berman Law Group, has been the point man in communicating with top administration officials that the most effective way to compensate Americans for their losses is a civil suit and that curbing sovereign immunity could ease their path in court.

Sorial said in an interview that the president and White House are right to examine every method to make America whole for trillions of dollars in losses to businesses small and large and tens of thousands of deaths. Lead attorney Matthew Moore said the lawsuit is probably shielded from dismissal by current case law, which holds that governments that intentionally fail to warn of danger cannot claim immunity from a lawsuit. Moore added that restricting China's immunity would make the case easier to pursue.

"I commend the president for what he is doing. We are now finally at the point that that kind of action is necessary," Sorial said. "No matter where you sit on the political spectrum, if you are being generous, the government of China and the CCP [Chinese Communist Party] were grossly negligent."

» FAQ: Your coronavirus questions, answered.

Chinese officials have said they did all they could to mitigate the risk and spread of the virus. They have also pointed to the country's decision to lock down Wuhan earlier this year and other major cities to contain the spread of the virus.

China has attempted to aggressively stave off the prospect of a coordinated push by Western governments to hold it accountable. After Australian officials proposed a joint international investigation into the origins of the virus that would include sending inspectors into Wuhan, the Chinese ambassador to Australia this week threatened Australia with economic retaliation, sharply inflaming tensions.

China's foreign minister, meanwhile, adopted a softer tack and thanked French President Emmanuel Macron after he expressed reservations about immediately launching the U.S.- and Australia-backed inquiry.

In early February, when American cities in Washington and California were seeing their first confirmed cases of the novel coronavirus infection, U.S. media reported that the virus originated in an exotic market that sold wild animals and described in detail the steps China had taken to lock down Hubei province to prevent it from spread.

As the weeks have passed, evidence has mounted that Chinese government officials sought to silence doctors who raised alarm about the virus' human-to-human transmission and potential lethality.

Some White House officials and some Republicans also think that new information has emerged to suggest that a low-security Wuhan virology lab that analyzed dangerous coronaviruses - and located near the market - may have been the original source of the virus's release and that Chinese officials sought to cover up information pointing to that source, according to two government officials.

But so far those theories have not been widely accepted or backed up with any material evidence. Many experts who have studied the outbreak do not think there were ties to the Wuhan lab, but U.S. officials continue to investigate the matter.

Trump weighed in on the controversy on Thursday. He was asked by a reporter whether he had seen intelligence that suggested with a high degree of confidence that the virus originated in the Wuhan lab, and he responded "yes I have."

But he later said "there's lots of theories" and that he wasn't "allowed" to tell reporters why he was confident the virus might have come from a lab.

The Office of the Director of National Intelligence issued its own statement on the matter, saying that it "will continue to rigorously examine emerging information and intelligence to determine whether the outbreak began through contact with infected animals or if it was the result of an accident at a laboratory in Wuhan."

Senior Trump administration officials - both in the National Security Council and the Centers for Disease Control and Prevention - have been furious at the Chinese government's lack of transparency and failure to follow security protocols amid the virus's march across the globe. That included China's resistance in January to letting U.S. officials visit China to investigate the virus's origins.

In a sign of the general shift toward taking on China, Trump's son-in-law, Jared Kushner, appeared on "Fox & Friends" on Wednesday, emphasizing the president is eyeing options to punish those responsible for the damage the virus has wreaked on the United States.

"He has asked the team to look into very carefully what happened, how this got here, and to make sure he will take whatever actions are necessary to make sure that the people who caused the problems are held accountable for it," Kushner said.

Shih reported from Seoul. The Washington Post’s Michael Birnbaum in Brussels and Ashley Parker in Washington contributed to this report.