U.S. Senators John Cornyn (R-TX), Chris Coons (D-DE), Bill Cassidy (R-LA), and Catherine Cortez Masto (D-NV) have introduced the No Tax Treaties for Foreign Aggressors Act. The bill would require the U.S. Department of the Treasury to end the U.S.-China Tax Treaty within 30 days if the President determines that China has launched an armed attack on Taiwan.
Senator Cornyn said, “The Chinese Communist Party must face dire consequences should it initiate an attack on Taiwan. By ending the U.S.-China Tax Treaty if the Chinese Communist Party invades Taiwan, this legislation would inflict rightful financial pain on Beijing, and I urge my colleagues to support it.”
Senator Coons stated, “Taiwan is on the front lines of our fight to ensure a free and open Indo-Pacific, and its security is critical to our own economy and security. I’ve seen first-hand that China is becoming increasingly aggressive toward Taiwan in the South China Sea. That’s why I’m proud to be a part of this bipartisan legislation to make it clear to China that if it attacks, we will stand with our partners, and ensure swift and severe consequences.”
Dr. Cassidy commented, “Aggression against U.S. allies has consequences—this bill is one of them.”
Senator Cortez Masto added, “The United States must stand strong with our allies in the Indo-Pacific against the threat of the expansionist Chinese Communist Party. It is our duty to defend democracy at home and abroad, and there should be swift and concrete consequences if China attacks Taiwan.”
Representative Tony Gonzales (TX-23) has introduced companion legislation in the House.
Tax treaties help multinational companies avoid double taxation by clarifying which countries can tax certain income. These agreements are based on standard models like the U.S. Model Income Tax Convention and are designed to support trade by lowering withholding taxes and providing certainty for investors.
The current U.S.-China Tax Treaty was negotiated during Ronald Reagan’s presidency and ratified by the Senate in 1986. Article 28 allows either country to terminate it with six months’ notice. The proposed legislation directs Treasury officials to use this provision if China attacks Taiwan as some analysts believe could happen by 2027.
John Cornyn has won several general elections in Texas: defeating MJ Hegar in 2020 with 53.5% of votes; David Alameel in 2014 with 61.6%; Ron Kirk in 2002 with 55%; and Rick Noriega in 2008 with 54.8%.
