War Department Designates Confucius Institutes as Threat to National Security
The Designation
The War Department has designated Confucius Institutes as a threat to national security.
The Defense Department has designated Confucius Institutes as a threat to United States national security.
Defense Secretary Pete Hegseth announced the move on Friday in a video posted on social media, according to Reuters. Hegseth said the Pentagon had added the Chinese-funded cultural centers to its list of institutions that threaten United States national security.
Reuters described the centers as Chinese-funded programs on university campuses. Washington has long accused Confucius Institutes of being Chinese propaganda tools, according to Reuters.
80 Organizations Across 30 Universities
Hegseth alleged the institutes were operating under disguise at United States universities, according to Reuters.
"It turns out that 80 new propaganda cells across 30 universities had popped up using different names and different charters, but with the same mission: to steal intellectual property and to infiltrate the minds of American students," Hegseth said, according to Reuters.
Hegseth said the Defense Department over the past two months has "systematically dismantled every single one of these organizations," according to Reuters.
Those specific claims about disguised operations, intellectual property theft and the two-month dismantling are Hegseth's, as reported by Reuters. Reuters said the Chinese embassy in Washington did not immediately respond to a request for comment.
Reuters also did not specify, in its initial report, what new restrictions, funding conditions or oversight would follow from the designation itself.
A Crackdown That Has Been Building for Years
Confucius Institutes were set up through partnerships to teach Mandarin and run Chinese cultural programs. The first in the United States was established at the University of Maryland in 2004, according to historical coverage of the program.
At their height, there were as many as 118 Confucius Institutes at American colleges and universities, according to the Foundation for Defense of Democracies, citing the earlier United States count.
A June 2022 report by the National Association of Scholars found that, out of the 118 institutes once in the United States, 104 had either shut down or were in the process of closing, according to the summary of that report. The same report said dozens of closed institutes had resurfaced in other forms or through similar partnership programs.
Federal policy helped drive those closures. In August 2020, the State Department designated the Confucius Institute United States Center as a foreign mission of China under the Foreign Missions Act, according to the Federal Register determination.
The National Defense Authorization Act for fiscal year 2021 then withheld federal research funds from colleges and universities that had Confucius Institutes, according to historical summaries of the law.
In May 2025, the House passed the DHS Restrictions on Confucius Institutes Act, according to the Foundation for Defense of Democracies. That history helps explain why Hegseth focused on successor programs under different names, rather than only on institutes still using the Confucius name.
How This Could Affect Markets
The designation is not a trade action, but it is another formal step in United States-China decoupling around research, education and intellectual property. Moves like this can raise headline risk for China-exposed assets, especially when traders expect retaliation, visa restrictions or tighter limits on academic and technology ties.
Stocks and funds to watch include China internet and large-cap exposure through BABA, BIDU, FXI and KWEB, where options flow can move quickly on Washington headlines.
Chinese education names are a more direct watch, including EDU and TAL, if investors read the move as a broader signal on education ties and student flows between the two countries.
On the other side of a prolonged decoupling trade, traders often watch United States defense names such as LMT and RTX for sympathy moves, though this designation on its own does not change defense spending.
The key follow-through will be whether the designation brings concrete funding, visa or research restrictions for universities, and whether Beijing responds.
Bottom Line
Washington had already pushed most Confucius Institutes off American campuses through funding and foreign-mission rules.
Hegseth's announcement, as reported by Reuters, says the government now believes the effort reappeared under other names, and says it has been dismantled again in the past two months.