Sen. Bernie Sanders questioned President Donald Trump’s China policy after U.S. Ambassador to China David Perdue reported that Trump asked Chinese President Xi Jinping if Beijing wanted to buy American weapons. The inquiry follows the White House’s clarification that such sales are prohibited by law.

Sanders highlights policy contradictions

On Monday, Sanders posted on X, contrasting Trump’s defense spending and AI regulations with the alleged arms inquiry. He noted that Trump advocates for a $1.5 trillion Pentagon budget to "beat" China and opposes AI guardrails for the same reason. Sanders asked, "If China is our so-called enemy, then why is Trump offering to sell them American weapons?"

The White House confirmed on Sunday that no offers or plans have been made to Beijing. Officials stated that arms sales to China remain illegal. The clarification came after Perdue told Fox News Sunday that Trump defended a pending U.S. arms sale to Taiwan by portraying it as one of many global deals. According to Perdue, Trump jokingly asked whether Xi might be interested in purchasing U.S. weapons.

Arms sales and diplomatic context

Perdue did not provide details about the alleged offer or clarify when it was made. He stated that U.S. policy toward Taiwan remains unchanged, with Washington opposing both Taiwanese independence and coercion despite continued Chinese military pressure.

U.S. arms sales have long supported Taiwan’s defense as a deterrent to China. While Washington announced more than $11 billion in potential weapons sales to Taiwan in December, Trump has yet to advance a separate $14 billion security funding package. Four Senate Republicans urged the administration to move the package forward ahead of the summit with Xi Jinping.

Perdue rejected criticism that Trump was not doing enough for Taiwan. He pointed to what he described as a 50% increase in U.S. arms sales to Taiwan compared with any president since 1979. U.S. intelligence agencies’ annual assessment in March found that China does not plan to invade Taiwan in 2027 and has no fixed reunification timeline.

Trade and AI discussions

Last week, Trump and Xi agreed to more favorable tariff treatment for $30 billion of goods in each direction and established a bilateral dialogue on advanced AI technology. Xi called for AI to remain "under human control," while Trump favored Department of Justice oversight over broad AI regulations.

Trump also pressed Xi to end direct or indirect support for Iran. Perdue said Beijing assured Washington it would not continue assisting Tehran, while an Iranian official said China had assured Tehran that its economic, political and military ties with Iran would remain intact.

Taiwan urges faster deliveries

Taiwan urged the Trump administration to expedite a delayed weapons package, stating that military strength is essential to deterring potential Chinese aggression. Taiwan representative Alexander Yui stated that Trump and Xi Jinping gave limited public attention to Taiwan during their Washington summit. Yui noted that Taiwan was not mentioned in the statements released by either the U.S. or China after the meeting.

What the numbers show

The data reveals a divergence between legislative prohibitions and rhetorical engagement. While the White House explicitly cites legal bans on arms sales to China, the Ambassador’s account of a "joking" inquiry suggests a complex diplomatic dynamic where defense trade serves as a bargaining chip or conversational topic rather than a policy proposal. Additionally, the contrast between the $11 billion announced sales and the stalled $14 billion package highlights a gap between stated commitments and execution speed, which Taiwan officials are actively pressing to close.

The Global Intangible Low-Taxed Income (GILTI) regime is replaced by Net CFC Tested Income (NCTI) for tax years beginning after December 31, 2025. This shift impacts US citizens and Green Card holders who own or control businesses overseas, requiring a review of international tax structures before the first NCTI filing season.

Darryl Albuquerque, Senior Tax Manager at Expat Tax Online, stated that the transition is more than a name change. US owners of foreign companies must carefully assess how the new calculation methods affect their specific corporate structures to ensure compliance and optimize tax outcomes.

Key changes under the NCTI regime

The new framework introduces three primary adjustments to how foreign income is taxed for US shareholders:

• Elimination of QBAI: The Qualified Business Asset Investment (QBAI) based tangible asset return no longer reduces the amount subject to Section 951A.
• Reduced Section 250 deduction: The deduction generally decreases from 50% to 40%.
• Improved foreign tax credit: The deemed-paid foreign tax credit percentage generally increases from 80% to 90%.

Timing and application

For calendar-year taxpayers, a distinct timing rule applies. Tax returns for 2025 filed in 2026 generally continue to use the GILTI rules. The new NCTI rules generally apply to the 2026 tax year.

The financial impact varies by taxpayer. These changes do not automatically result in higher US tax liability for every affected individual. The final outcome depends on several factors, including the company’s foreign tax rate, income levels, ownership structure, and whether a Section 962 election is utilized.

What the numbers show

The interplay between the reduced Section 250 deduction and the increased foreign tax credit creates a divergent impact on effective tax rates. While the deduction available against foreign income shrinks from 50% to 40%, potentially increasing the taxable base, the ability to claim foreign taxes as credits improves from 80% to 90%. This suggests that taxpayers with higher foreign tax rates may see offsetting benefits, whereas those with lower foreign tax rates might face a net increase in US tax exposure due to the lower deduction.