Trump Softens Approach Towards Chinese Investments

July 2, 2018

 

The Trump administration said on Wednesday (June 27th) that it would rely on an existing Treasury Department-led committee to restrict new Chinese investments in American technology companies, backing away from a more aggressive approach that would have declared a national economic emergency and dramatically limited China’s ability to invest in the United States. President Trump opted instead to rely on legislation to enhance the powers of the committee known as the Committee on Foreign Investment in the United States, or CFIUS, which reviews proposed acquisitions of U.S. assets by foreign investors. At the end of its review, the president can block proposed investments.

 

Officials had considered preventing Chinese-owned companies from acquiring more than 25 percent of American firms that own sensitive technologies. The president said the proposed legislation would allow the U.S. to protect its technological crown jewels without compromising an open investment climate. Wednesday’s announcement comes amid an intensifying trade dispute between the U.S. and China. Tariffs on $34 billion (RMB 225 billion) in Chinese products are scheduled to take effect on July 6, with additional trade barriers planned in subsequent weeks. China has pledged to retaliate with equivalent measures.

 

The president also directed his top advisers to work with U.S. allies to bolster efforts to combat intellectual property theft and improper technology acquisition.

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