Trump instructs to restrict Chinese investment in cutting-edge technology, etc. in the United States

On February 21, US President Trump signed a policy memorandum instructing to restrict Chinese investment in the United States in security-related fields such as cutting-edge technology and important infrastructure. In terms of policy implementation, the Committee on Foreign Investment in the United States (CFIUS), which is an inter-departmental organization, will be used. On the one hand, preferential measures will be set for investments from allies to strive to activate domestic industries in the United States.

Trump signed a memorandum called “American First Investment Policy”. The targets of restricting investment in the United States are defined as “hostile forces from foreign countries such as China”, and it is clearly stated that all legal means, including CFIUS review, will be used to restrict investment in strategic sectors such as cutting-edge technology, important infrastructure and medical care in the United States.

In the fields of semiconductors, artificial intelligence, quantum technology and biotechnology, the United States will also strengthen its supervision of Chinese investment. It is planned to discuss the inclusion of private equity investments and venture capital investments of investors including pension funds and university funds in the scope of supervision. The memorandum also mentioned considering suspending or terminating the tax agreement with China that came into effect in 1984.

On the 22nd, the Ministry of Commerce of China released a press statement, saying: “China will closely monitor the US’s movements and take necessary measures to defend its legitimate rights and interests.” The statement emphasized: “China urges the US to abide by international investment and trade rules, respect the laws of the market economy, and stop politicizing and weaponizing economic and trade issues.”

On the other hand, the United States will establish a “fast track” for investment from allies, and conduct rapid reviews in important areas with objective standards.

The US government has also proposed a policy of raising tariffs on allies, believing that the expansion of the trade deficit has resulted in the decline of the domestic industry in the United States. The purpose of the United States raising tariffs is to increase the burden on overseas exports to the United States while promoting companies to shift to domestic production in the United States.

Statistics from the US Department of Commerce show that by the end of 2023, the balance of overseas direct investment in the United States increased by 4% over the previous year to US$5.39 trillion. Manufacturing accounts for 40%.