President Donald J. Trump issued a National Security Presidential Memorandum (NSPM) to encourage foreign investment while maintaining America’s national security interests. The US will establish a “fast-track” procedure to encourage increased investment from specific friends and partners, with stipulations prohibiting investors from collaborating with our foreign foes in similar sectors. The United States will also speed environmental evaluations for investments above $1 billion. The Committee on Foreign Investment in the United States (CFIUS) will be used to limit Chinese investment in key US sectors such as technology, vital infrastructure, healthcare, agriculture, energy, raw materials, and others. It will limit foreign adversaries’ access to US talent and activities in key technologies.
Trump is actively seeking foreign investment from allied and friendly countries under its MAGA policies for building futuristic and advance capabilities in high-growth sectors. Investments are strategic to US National Interest and raises National security concern, driven by proliferation of dual-usage technologies to US adversaries. Certain advanced technologies e.g., semiconductors, artificial intelligence, space programs are seen as critical to national security, so foreign investments in these areas are set to be closely monitored under new rule to prevent transfer of sensitive knowledge or control to adversarial states.
China has been a focal point in the U.S. government’s scrutiny due to concerns about technology transfer, espionage, and intellectual property theft. This has led to a focus on limiting Chinese investment in certain sectors, especially technology. The primary concern is the possibility of foreign governments or companies gaining control over infrastructure or technologies that are critical to defense, intelligence, or economic power.
The Trump administration will consider new or expanded restrictions on US outbound investment in sensitive technologies such as semiconductors, artificial intelligence, quantum, biotechnology, aerospace, and others in order to prevent American funds from supporting China’s Military-Civil Fusion (MCF) strategy.
China has been making systematic investments in American corporations to obtain access to cutting-edge technology, intellectual property, and critical industry influence. Foreign businesses and people own around 43 million acres of agricultural land in the United States, accounting for over 2% of total land in the country. China has almost 350,000 acres of agriculture in 27 states.
Washington believes PRC does not allow American corporations to take over their essential infrastructure hence United States should not allow the PRC to take over American critical infrastructure. PRC affiliated investors are focusing on the United States’ crown jewels: technology, food supply, agriculture, minerals, natural resources, ports, and shipping facilities. T PRC is increasingly relying on US finance to build and modernize its military, intelligence, and other security apparatuses, posing a substantial threat to the United States homeland and Armed Forces worldwide. Related acts include the development and deployment of dual-use technology, weapons of mass destruction, enhanced conventional weapons, and harmful cyberattacks on the United States and its citizens.
Promoting foreign investment while protecting national security interests is a delicate balancing act. The goal is to attract investment from abroad to fuel economic growth and innovation, while ensuring that these investments do not pose risks to the nation’s security, particularly in sensitive industries. CFIUS (Committee on Foreign Investment in the United States) is central to this process. CFIUS reviews foreign investments in U.S. businesses to assess whether the transaction could impact national security. CFIUS can block or impose conditions on transactions, particularly when they involve sensitive sectors like telecommunications, defense, energy, or emerging technologies (e.g., AI, quantum computing, etc.). The National Security Presidential Memorandum (NSPM-11) signed by Trump in 2017, and the Foreign Investment Risk Review Modernization Act (FIRRMA) passed in 2018, broadened CFIUS’s ability to review more types of foreign investments. It enabled scrutiny of not just foreign acquisitions, but also non-controlling investments, such as those involving sensitive data or technologies, even if the foreign party doesn’t take full control.
There are sector-specific safeguards in place to monitor investments in industries like telecommunications (e.g., 5G infrastructure), cybersecurity, biotechnology, and defense contracting. These industries are considered critical because of their strategic importance to national defense, public safety, and the overall resilience of the economy.
NSPM will conduct a Section 301 inquiry into China’s activities including forced technology transfer, unfair licensing, and intellectual property rules. A Department of Justice China Initiative has been launched to detect and prosecute trade secret theft, hacking, and economic espionage. It will take steps to prevent foreign hostile actors from obtaining access to US information networks.
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