PROTECT Taiwan Act: US Threatens to Kick China Out of G20, Global Finance Groups Over Taiwan Security

The new Pressure Regulatory Organizations To End Chinese Threats to Taiwan Act, or the PROTECT Taiwan Act, is a foreign policy bill with a major financial twist. What it does, simply put, is establish a new U.S. policy: if the President decides that the People’s Republic of China (PRC) is threatening Taiwan’s security or economy—or even just posing a danger to U.S. interests—then the U.S. will actively work to exclude PRC representatives from several major international financial organizations.

This isn't just diplomatic finger-wagging. We're talking about heavy hitters like the G20, the Bank for International Settlements, the Financial Stability Board, and the Basel Committee on Banking Supervision. If the President throws the flag, agencies like the Treasury Department, the Federal Reserve, and the Securities and Exchange Commission (SEC) are directed to start pushing the PRC out of the room during meetings and proceedings. It’s a direct attempt to use global financial governance as leverage against geopolitical actions, and it’s set to expire after five years, acting as a temporary, high-stakes policy tool.

The Geopolitical Trigger and the Financial Fallout

The most critical part of this bill is the trigger mechanism outlined in SEC. 2. The entire policy kicks in based on a Presidential determination that the PRC is presenting a "threat to Taiwan's security or economic system, or a danger to U.S. interests." That language is broad. It means the President has significant leeway to decide when and how to deploy this financial exclusion policy. For everyday people, this matters because it connects our national security policy directly to the stability of global financial forums.

If you run a small business that relies on international trade, or if your retirement fund is invested globally, you want these international bodies to be stable and effective. They set the rules for banking safety and market stability worldwide. Kicking out the world’s second-largest economy from the G20 or the Financial Stability Board could lead to diplomatic chaos and potentially fragment global financial rule-making. This could introduce new risks into the international system, which eventually trickles down to slower growth or increased market volatility here at home.

The President’s Financial Veto Power

While the bill mandates exclusion upon the threat determination, it also gives the President a significant out. The President has the authority to waive the exclusion for any organization if they report to Congress that the waiver is in the national interest of the United States. This provision concentrates significant power in the executive branch to manage highly sensitive international financial relations. Essentially, the President gets to decide when to use the stick and when to put it away, with Congress only receiving an explanation, not a vote, on the decision.

This is a classic example of a policy tool that looks good on paper for signaling resolve but could be messy in practice. While the intent is to protect Taiwan and signal strong U.S. resolve, the cost could be paid in fractured international cooperation. Excluding the PRC from key regulatory bodies might just lead them to create parallel systems, ultimately diluting the U.S. influence in global finance—a crucial area for maintaining economic stability for everyone, from Wall Street traders to the average person paying a mortgage.