Senator Cornyn

Cornyn, Colleagues Introduce Bill to Enact Consequences of a Chinese Invasion of Taiwan

March 5, 2024

WASHINGTON – U.S. Senators John Cornyn (R-TX), Chris Coons (D-DE), Bill Cassidy (R-LA), and Catherine Cortez Masto (D-NV) today introduced legislation that would require the U.S. Department of the Treasury to terminate the U.S.-China Tax Treaty within 30 days of a Presidential determination that China has initiated an armed attack on Taiwan:

“The United States must make it crystal clear the Chinese Communist Party will face dire consequences if it moves to invade Taiwan,” said Sen. Cornyn. “This legislation would require the Treasury Department to terminate the U.S.-China Tax Treaty if the Chinese Communist Party initiates an armed attack on Taiwan, and I urge my colleagues to support it.”

“The security of our partners in the Indo-Pacific is critical to American trade objectives, regional stability, and fostering democracy around the world,” said Sen. Coons. “That’s why I am proud to cosponsor this bipartisan legislation to signal that potential aggression from the Chinese against Taiwan would be seriously detrimental to our economic relationship and incur immediate, severe consequences.”

“It is common sense that if China attacks our ally, then China should be penalized,” said Sen. Cassidy. “This is part of that penalty.”

“Taiwan is one of our most important partners in the Indo-Pacific, and the U.S. will continue to support Taiwan’s democratic values and hold the Chinese Communist Party accountable,” said Sen. Cortez Masto. “This legislation will help deter aggression in the region by making it clear that the U.S. will not give favorable tax treatment to countries that make war on their neighbors.”


Multinational companies and individuals often face tax issues that arise in jurisdictions with differing laws. To clarify which countries can tax what income and when, bilateral and multilateral tax treaties commit countries to playing by the same set of rules. These tax treaties are modeled after the U.S. Model Income Tax Convention and facilitate trade and investment by eliminating double taxation, lowering certain withholding taxes, and creating certainty for businesses when they are making investment decisions. Former President Ronald Reagan’s administration negotiated the U.S.-China Tax Treaty, which was ratified by the Senate in 1986 and includes a provision (Article 28) that allows either country to terminate it with six months’ notice. 

Last October, Sens. Cornyn and Cortez Masto sent a letter urging the Biden administration to terminate the United States’ tax treaty with Russia as a consequence of Russian President Vladimir Putin’s illegal and unprovoked war in Ukraine.