Biden administration warning US companies of China risks an 'important message': Fmr. NYSE CEO

The administration warns that companies doing business in Xinjiang may be violating US law

Former New York Stock Exchange CEO Dick Grasso argued on "Cavuto: Coast to Coast" on Tuesday that President Biden has the "right to push back" on Beijing and that the Biden administration’s warning to U.S. companies of the increasing risks of operating in China is an "important message." 

"Beijing has a strategy to become the world’s largest economy, some say by 2040, some say by 2050," Grasso noted on Tuesday. 

"They’re not going to get even close to that objective if they continue to do what they’ve been doing in terms of human rights and in terms of restricting business practices." 

He went on to say that he believes "that the new president is being tested." 

"He’s being tested by Beijing on this subject, by Tehran on nuclear, by Russia on cyber and I think he’s right to push back and be tough on all three of those," Grasso stressed. 

On Tuesday, the Biden administration issued an updated advisory to companies about the "heightened risks" of doing business in Xinjiang, China due to human rights abuses in the region, warning that businesses that do not cease ventures there "run a high risk of violating U.S. law." 

The State Department, Treasury Department, Department of Commerce, Department of Homeland Security, the Office of the U.S. Trade Representative and the Department of Labor on Tuesday issued an updated "Xinjiang Supply Chain Business Advisory" in response to the People’s Republic of China’s "ongoing genocide and crimes against humanity in Xinjiang and the growing evidence of its use of forced labor there." 

The updated advisory highlights the heightened risks for businesses with supply chain and investment links to Xinjiang "given the entities complicit in forced labor and other human rights abuses there and throughout China." 

"The updated advisory stresses that businesses and individuals doing business in Xinjiang do not currently have the capacity to engage in adequate due diligence, given the limitations imposed by the Chinese government," the Labor Department said Tuesday. 

"Therefore, those that do not exit supply chains, ventures and/or investments connected to Xinjiang run a high risk of violating U.S. law," the Labor Department added.

The Department of Labor said China’s crimes against humanity include "imprisonment, torture, rape, forced sterilization and persecution, including through forced labor and the imposition of draconian restrictions on freedom of religion or belief, freedom of expression and freedom of movement." 

COMPANIES RIPPING GEORGIA DO BUSINESS IN CHINA, SILENT ON HUMAN RIGHTS VIOLATIONS

China has reportedly denied claims of genocide and forced labor in Xinjiang.

Reuters reported that Chinese foreign ministry spokesman Zhao Lijian told a press briefing in Beijing on Tuesday that the warning is "typical political manipulation and double standards" by Washington. 

He reportedly also said the rights of foreign investors in Hong Kong are clearly protected by Hong Kong's laws. 

Host Neil Cavuto noted that markets did not seem to react significantly when reports began to surface that the U.S. government was expected to warn companies of increasing risks of operating in Hong Kong and also provide an update to the previously issued warning on Xinjiang. 

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 30933.53 -13.46 -0.04%
SP500 S&P 500 3804.52 -17.03 -0.45%
I:COMP NASDAQ COMPOSITE INDEX 11119.430206 -62.11 -0.56%

Later in the afternoon Tuesday, U.S. stock markets dropped lower, with The Dow Jones Industrial Average falling 87 points, or 0.07%, while the S&P 500 and the Nasdaq Composite slipped 0.23% and 0.18%, respectively. All three of the major averages finished at all-time highs on Monday. 

"The U.S. economy is really on fire," Grasso told Cavuto on Tuesday.   

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He then stressed that he believes "the greatest risk" to the economic performance of the U.S. "is not Beijing, Tehran or Moscow," but is "Washington, D.C." 

"I think D.C. has got to right the ship in terms of spending, in terms of the allocations of credit and what they expect of U.S. companies," Grasso explained. 

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Fox News’ Brooke Singman contributed to this report.